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Opinions – 7/30/12: 4th U.S. Circuit Court of Appeals

Constitutional Law

Compelled non-commercial speech

BOTTOM LINE: City ordinance requiring limited-service pregnancy centers to post signs disclaiming that they did not provide or make referral for abortion or birth control services violated pregnancy center’s right to free speech, because ordinance was content-based restriction compelling non-commercial speech and was not narrowly tailored to serve compelling government interest, and therefore did not satisfy applicable strict scrutiny standard.

CASE: Greater Baltimore Center for Pregnancy Concerns, Incorporated v. Mayor and City Council of Baltimore, No. 11-1111 (decided June 27, 2012) (Judges NIEMEYER, King & Agee). RecordFax No. 12-0627-60, 79 pages.

COUNSEL: Suzanne Sangree, Baltimore City Department of Law, Baltimore, MD, for Mayor and City Council of Baltimore, Stephanie Rawlings-Blake, Mayor of Baltimore, in her Official Capacity, and Oxiris Barbot, Baltimore City Health Commissioner. David Kinkopf, Gallagher Evelius & Jones, LLP, Baltimore, MD, for Greater Baltimore Center for Pregnancy Concerns, Incorporated, St. Brigid’s Roman Catholic Congregation, Incorporated, Archbishop Edwin O’Brien, Archbishop of Baltimore and His Successors in Office, A Corporation Sole.

FACTS: Archbishop Edward O’Brien, St. Brigid’s Roman Catholic Congregation, Inc., and the Greater Baltimore Center for Pregnancy Concerns, Inc. (“the Pregnancy Center”) commenced this action against the Mayor and City Council of Baltimore, challenging the constitutionality of the City’s Ordinance 09-252, which required that “limited-service pregnancy centers” such as the Pregnancy Center post signs disclaiming that they did not provide or make referral for abortion or birth control services. The complaint alleged that the ordinance, both facially and as applied to the plaintiffs, violated the plaintiffs’ free speech, free exercise, and equal protection rights under the First and Fourteenth Amendments to the U.S. Constitution, as well as the plaintiffs’ rights under the Conscience Clause of Maryland’s health law.

The district court granted summary judgment to the Pregnancy Center on its freedom of speech count, dismissed the Archbishop and St. Brigid’s as plaintiffs for lack of standing, and dismissed the remaining counts without prejudice, in view of its free speech ruling. The court held that the disclaimer required by Ordinance 09-252 was a form of compelled speech that altered the course of a pregnancy center’s communication with a client or prospective client about abortion and birth-control and was based, at least in part, on disagreement with the viewpoint of the speaker. The court entered a permanent injunction barring enforcement of the ordinance.

The defendants appealed to the 4th Circuit, which affirmed.

LAW: In its appeal, the City first contended that the district dcourt erred in applying strict scrutiny to the ordinance. It argued that the ordinance, even though compelling speech, compelled only commercial speech, which is subject to a lower level of scrutiny. However, as the Pregnancy Center contended, the ordinance did indeed compel the Pregnancy Center to speak, mandating it to post a sign that it did not not provide or make referral for abortion or birth-control services. Moreover, in compelling that speech, the Pregnancy Center was, in this case, required to participate in the City’s effort to tell pregnant women that abortions were available elsewhere as a morally acceptable alternative, contrary to the moral and religious beliefs of the Pregnancy Center. A representative of the Pregnancy Center stated that absent the ordinance’s mandate, the Pregnancy Center would not speak to clients and potential clients in the manner required by the ordinance.

It is well-established that a regulation compelling noncommercial speech is subject to strict scrutiny and must be narrowly tailored to serve a compelling governmental interest. United States v. Playboy Entm’t Group, Inc., 529 U.S. 803, 813 (2000). The First Amendment protects not only the right to speak freely, but also the right to refrain from speaking at all. Wooley v. Maynard, 430 U.S. 705, 714 (1977). In this case, the City argued that the speech mandated here was commercial speech and was therefore subject to the lower standard of judicial scrutiny applicable to commercial speech. Specifically, the City asserted that although many pregnancy centers operate as non-profits, they effectively engage in commerce by offering pregnancy testing, sonograms, and options counseling, all of which have commercial value.

The City’s formulation of the commercial speech doctrine was not supported by the law. Commercial speech is defined as “expression related solely to the economic interests of the speaker and its audience.” Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 561 (1980). Rather than regulating traditional commercial advertising, Ordinance 09-252 targeted speech regarding the provision of “free services.” There was no indication that the Pregnancy Center was motivated by any economic interest or that it was proposing any commercial transaction; instead, the Pregnancy Center sought to provide free information about pregnancy, abortion, and birth control as informed by a religious and political belief. This kind of ideologically driven speech has routinely been afforded the highest levels of First Amendment protection, even when accompanied by offers of commercially valuable services. See, e.g., In re Primus, 436 U.S. 412, 422, 439 (1978). As such, the district court properly concluded that the pregnancy centers were not engaged in commercial speech and that their speech could not be denied the full protection of strict scrutiny on that basis.

Content-based speech regulations are presumptively invalid. R.A.V. v. City of St. Paul, 505 U.S. 377, 382 (1992). Thus, in order to satisfy strict scrutiny standards, it was necessary for the City to show that the ordinance was narrowly tailored to promote a compelling Government interest, such that the ordinance was the least restrictive alternative to serve the government’s purpose. Id. at 813. However, the record established, at most, only isolated instances of misconduct by pregnancy centers generally, and none by the Pregnancy Center itself – indicating that the need for regulation of those centers was not as pressing as the City asserted.

Moreover, even apart from the weaknesses in the City’s demonstration of a “compelling” government interest, the more significant problem was that the ordinance was not narrowly tailored to serve the City’s interest. For one, the ordinance purported to target false advertising, yet failed actually to regulate deceptive practices or false advertising. The ordinance was also overinclusive in that it applied equally to pregnancy centers that engaged in deceptive practices and those whose speech was entirely truthful. See Fed. Election Comm’n v. Mass. Citizens for Life, Inc., 479 U.S. 238, 265 (1986). Finally, there were also several alternatives that would address the problems targeted by the ordinance while imposing a lesser burden on speech.

As such, district court correctly concluded that the ordinance did not satisfy the applicable strict scrutiny standard and was therefore unconstitutional. Accordingly, the judgment of the district court was affirmed.

Criminal Procedure

Effective assistance of counsel

BOTTOM LINE: A death-row inmate failed to show ineffective assistance of counsel based on his trial lawyer’s decision to let him make an inculpatory statement to police without any promise of reduced sentence, because it was a reasonable litigation strategy to attempt to avoid the death penalty by demonstrating the defendant’s genuine remorse and willingness to help police, and because the outcome of the guilt phase would have been no different had the defendant not made the statement to police.

CASE: U.S. v. Fulks, No. 11-3 (decided June 26, 2012) (Judges Wilkinson, KING & Agee). RecordFax No. 12-0626-61, 22 pages.

COUNSEL: Billy Nolas, Amy Donnella, Federal Community Defender Office, Philadelphia, PA, for Appellant. Thomas Booth, United States Departmnet of Justice, Washington, for Appellee.

FACTS: Chadrick Fulks was charged with multiple crimes relating to the abduction and murder of Alice Donovan on November 14, 2002, in the course of a multi-state crime spree engineered by Fulks and his cohort, Brandon Basham, following their escape from a Kentucky jail. Three days prior to the carjacking, kidnapping and killing of Donovan, Samantha Burns suffered the same fate in West Virginia at the hands of Fulks and Basham.

Fulks was indicted on various charges, and his lead defense attorney, John Blume, allowed him to make an inculpatory statement to the police. On December 20, 2004, after pleading guilty in federal court in North Carolina to charges of carjacking resulting in death, in violation of 18 U.S.C. §2119(3), and kidnapping resulting in death, as proscribed by 18 U.S.C. §1201, Fulks was sentenced to death.

The sentence was affirmed on appeal. The Supreme Court denied Fulks’s petition for certiorari. On June 23, 2008, in accordance with 28 U.S.C. §2255, Fulks filed a motion in the district court seeking to vacate his conviction and sentence and to be tried anew. The district court denied the motion.

Fulks appealed to the 4th Circuit, which affirmed.

LAW: Fulks argued that his counsel was constitutionally deficient in allowing him to make an inculpatory statement to the FBI without procuring any promise of leniency or reduced sentence from the government.

The Sixth Amendment to the Constitution secures to all criminal defendants the right to the effective assistance of counsel. Strickland v. Washington, 466 U.S. 668, 686 (1984). A prisoner seeking collateral relief from his conviction or sentence under Strickland must demonstrate both that counsel’s performance was deficient, and that the defense was thereby prejudiced. Tice v. Johnson, 647 F.3d 87, 102 (4th Cir. 2011). In view of the latitude customarily afforded criminal defense lawyers in formulating strategy, deficient performance will not be adjudged unless, in light of all the circumstances, the identified acts or omissions were outside the wide range of professionally competent assistance. Strickland, 466 U.S. at 690.

In the present case, Fulks’s statement to the FBI on April 21, 2003, about five months after his arrest, was made ostensibly because he wanted to tell the truth and help locate the body of Alice Donovan. The statement related, in part, that Basham carjacked Donovan’s BMW and kidnapped her in a parking lot while Fulks circled in another stolen vehicle, that Basham carried a revolver, but Fulks was unarmed, that Basham raped Donovan in the car’s backseat and pressured a reluctant Fulks to do the same. Fulks’s was not exchanged for the promise of a reduced sentence, nor was it given in the form of a limited-use proffer. John Blume, the lead defense counsel, claimed that he did not wish to subject Fulks to cross-examination by having him testify at the sentencing trial, and that, through the statement, Fulks could submit his version of the events, which was that he was not the actual killer, and that the government would hopefully admit this information at trial as Fulks’s version of the offense.

Blume insisted that he wanted the statement to demonstrate acceptance of responsibility and some true indicia of remorse. He acknowledged that having Fulks make the statement committed the defense to entering a guilty plea about one year later, but stated that both decisions were intended to achieve the “best case scenario” of avoiding the death penalty. Blume did not see any credible defense or issue that would lead to a verdict of not guilty, and told his client that he believed that that best chance of saving Fulks’s life was to plead guilty.

Review of the record revealed that the facts establishing Fulks’s involvement in the events leading to Donovan’s death were indeed beyond peradventure. The compelling case against Fulks left his lawyers with little leverage for negotiation. The uncontroverted evidence showed that the government had informed Fulks that it would not negotiate a protected statement and, indeed, that the government would have foregone any interview of Fulks rather than receive information from him that could not be used against him. Given the unpalatable hand the defense team was dealt, having Fulks speak to the authorities and then plead guilty were reasonable litigation tactics. Moreover, in view of the totality of the evidence, regardless of the strategy employed by the defense, the outcome of the guilt phase would have been the same. As such, defense counsel was not unconstitutionally deficient, and Fulks did not suffer any prejudice.

Accordingly, the judgment of the district court was affirmed.

Criminal Procedure

Habeas corpus

BOTTOM LINE: Death-row inmate’s state-court attorneys were ineffective for failing to argue during sentencing that petitioner was mentally retarded and hence ineligible under Virginia law for death penalty, and, given that the state court did not adjudicate defendant’s habeas corpus claims on the merits, that court’s decision was not entitled to substantial deference under the Antiterrorism and Effective Death Penalty Act.

CASE: Winston v. Pearson, No. 11-4 (decided June 25, 2012) (Judges Gregory, Duncan & DIAZ). RecordFax No. 12-0625-60, 29 pages.

COUNSEL: Katherine Burnett, Office of the Attorney General of Virginia, Richmond, VA, for Appellant/Cross-Appellee. Jennifer Givens, Federal Community Defender Office, Philadelphia, PA, for Appellee/Cross-Appellant.

FACTS: On April 19, 2002, two men broke into Rhonda and Anthony Robinson’s Virginia home and killed them. Police later arrested Leon Winston, and the Commonwealth of Virginia charged him with capital murder and several lesser crimes. Winston was found guilty of capital murder and related crimes.

During sentencing, Winston’s attorneys presented records of his psychological evaluations and testimony about his family history. The attorneys used the records and testimony as ordinary mitigating evidence to illuminate Winston’s troubled childhood and sub-average intellectual functioning, but not to establish mental retardation. At the conclusion of the sentencing proceeding, the jury recommended a sentence of death for each of the murders, and the court sentenced Winston to death. Winston’s direct appeals failed, and his conviction became final, at which point he sought habeas relief in state court. The Supreme Court of Virginia denied relief, rejecting Winston’s requests for discovery and an evidentiary hearing.

Winston then filed a habeas petition in federal district court pursuant to the Antiterrorism and Effective Death Penalty Act (“AEDPA”), 28 U.S.C. §2254. The district court granted him an evidentiary hearing to explore whether his trial attorneys were ineffective for failing to raise the claim that his mental retardation categorically barred imposition of a death sentence. However, after presiding over the hearing, the district court held that it was precluded from considering any evidence adduced during the federal proceeding. The district court noted that the state-court decision qualified as an adjudication on the merits, requiring it to apply the deferential standards of §2254(d). Viewing only the evidence presented in state court, the court concluded that the Supreme Court of Virginia’s adjudication on the merits of Winston’s ineffective assistance claim was not unreasonable, and consequently denied Winston’s habeas petition.

Winston appealed to the 4th Circuit, which vacated in part the district court’s decision and ordered the district court to conduct a de novo review of Winston’s ineffectiveness claim while entertaining the evidence offered during the federal hearing. On remand, the district court granted Winston’s petition for habeas relief and vacated his death sentence, concluding that deference to the Supreme Court of Virginia’s decision was unwarranted under §2254(d) because that court had not adjudicated Winston’s claims on the merits. (“Winston I”).

Virginia appealed to the 4th Circuit, which affirmed the district court’s grant of habeas relief.

LAW: Virginia erroneously argued that two cases, Cullen v. Pinholster, 131 S. Ct. 1388 (2011), and Harrington v. Richter, 131 S. Ct. 770 (2011), established that the Supreme Court of Virginia’s denial of Winston’s habeas claims was an adjudication on the merits, entitled to substantial deference under the AEDPA. The Supreme Court in Pinholster reviewed the Ninth Circuit’s grant of habeas relief to a California prisoner. The Court stated, “If a claim has been adjudicated on the merits by a state court, a federal habeas petitioner must overcome the limitation of §2254(d)(1) on the record that was before the state court.” Id. at 1400. In Richter, the Court elaborated on the AEDPA’s “adjudicated on the merits” requirement, stating that when a federal claim has been presented to a state court and the state court has denied relief, in the absence of any indication to the contrary, it may be presumed that the state court adjudicated the claim on the merits. Richter, 131 S. Ct. at 784-85.

However, neither of these decisions clarified the “adjudicated on the merits” requirement of §2254(d)(1) so as to compel disturbing the district court’s holding that the state-court denial of Winston’s habeas petition was not an adjudication on the merits. Pinholster would impeach the ruling in Winston’s habeas appeal only it rejected the conclusion that the Supreme Court of Virginia’s decision was not an adjudication on the merits (which it did not). However, §2254(d) did not apply to Winston’s ineffectiveness claim, and de novo review of the claim was therefore appropriate.

Winston contended that his trial attorneys were ineffective for failing to argue to the jury during sentencing that he was mentally retarded. Had the court concluded that Winston was mentally retarded, he could not have been sentenced to death under Virginia law. Va. Code Ann. §19.2-264.3:1.1(A). Had Winston’s trial attorneys presented evidence of his mental retardation at sentencing, there was a reasonable probability that the court would not have sentenced him to death. Thus, Winston demonstrated both deficient performance by his attorneys and prejudice, as required under Supreme Court precedent.

Accordingly, the district court’s grant of habeas relief was affirmed.

Criminal Procedure
Predicate offense for enhanced sentence

BOTTOM LINE: For purposes of statute imposing mandatory sentence for person with certain predicate convictions, defendant’s prior conviction under Virginia law for “Production, Publication, Sale, or Possession, etc. of Obscene Items Involving Children” constituted conviction “related to either sexual abuse or abusive sexual conduct involving a minor” and therefore triggered mandatory statutory sentence.

CASE: U.S. v. Colson, No. 11-4709 (decided June 25, 2012) (Judges NIEMEYER, Gregory & Hamilton). RecordFax No. 12-0625-61, 9 pages.

COUNSEL: Patrick Bryant, Office of the Federal Public Defender, Alexandria, VA, for Appellant. Elizabeth Yusi, Office of the United States Attorney, Norfolk, VA, for Appellee.

FACTS: Ronald Colson pleaded guilty to six counts of receiving movies depicting actual female minors engaged in actual and simulated genital and oral sex with adult males, in violation of 18 U.S.C. §2252A(a)(2). Because Colson had a prior state conviction, which the district court concluded “related to either sexual abuse or abusive sexual conduct involving a minor,” the court imposed, over Colson’s objection, a 15-year mandatory minimum term of imprisonment, as provided by 18 U.S.C. §2252A(b)(1). The prior conviction that the court relied on was a 1984 conviction under Virginia law for the “Production, Publication, Sale, or Possession, etc. of Obscene Items Involving Children,” Va. Code Ann. §18.2-374.1(B)(2) (1984).

Colson appealed his sentence to the 4th Circuit, arguing that the 1984 conviction did not qualify as a predicate offense under §2252A(b)(1). The 4th Circuit affirmed the sentence.

LAW: In determining whether a prior conviction qualifies as a predicate offense for the applicable statutory enhancement, the reviewing court must apply the categorical approach. See United States v. Spence, 661 F.3d 194, 197-99 (4th Cir. 2011). Under the categorical approach, the court does not delve into the facts of the prior conviction but generally looks only to the fact of conviction and the statutory definition of the prior offense. Shepard v. United States, 544 U.S. 13, 17 (2005).

The categorical approach has an exception which allows review of other documents involved in the prior conviction that might reveal the facts on which the conviction necessarily rested. See id. at 20-21. Here, Colson contended that the district court erred as a matter of law because his 1984 conviction did not, when considered under the categorical approach, relate to sexual abuse involving a minor.

In the present case, all of the court records of Colson’s prior conviction had been destroyed due to the age of the conviction. Because the government presented no documents acceptable under Shepard that would allow consideration of the specific conduct that led to the Colson’s conviction, it was necessary to look only to the statutory definition of the state crime and the fact of conviction to determine whether the conduct criminalized by the statute, including the most innocent conduct, qualified as an offense “relating to” the predicate offenses listed in 18 U.S.C. §2252A(b)(1). United States v. Diaz-Ibarra, 522 F.3d 343, 348 (4th Cir. 2008). At the time of Colson’s prior conviction, the relevant Virginia statute provided that a person shall be guilty of a Class 5 felony who produces or makes or attempts to prepare or prepares to produce or make sexually explicit visual material which utilizes or has as a subject a person less than 18 years of age. Va. Code Ann. §18.2-374.1(B)(2) (1984). It defined “sexually explicit visual material” as a picture, photograph, drawing, sculpture, motion picture, film, digital image or similar visual representation which depicts sexual bestiality, a lewd exhibition of nudity, or sexual excitement, sexual conduct or sadomasochistic abuse. Va. Code Ann. §18.2-374.1(A) (1984).

Accordingly, it was necessary to determine whether a conviction for the lewd exhibition of nudity under Virginia Code, §18.2-374.1(B) (1984) amounted to a conviction “relating to” sexual abuse or abusive sexual conduct involving a minor, or the production of child pornography. 18 U.S.C. §2252A(b)(1). See Johnson v. United States, 130 S. Ct. 1265, 1269 (2010). The phrase “sexual abuse of a minor” as used in the Sentencing Guidelines means the “perpetrator’s physical or nonphysical misuse or maltreatment of a minor for a purpose associated with sexual gratification.” United States v. Diaz-Ibarra, 522 F.3d 343, 352 (4th Cir. 2008). This definition of “sexual abuse” is equivalent to the definition that other courts of appeals have employed in interpreting the language of 18 U.S.C. §2252A. See, e.g., United States v. Sonnenberg, 556 F.3d 667, 670 (8th Cir. 2009).

Employing the Diaz-Ibarra definition of sexual abuse, a prior conviction for the production or attempted production of a “lewd exhibition of nudity” that utilizes a minor as its subject relates to sexual abuse and abusive sexual conduct involving a minor. The Virginia statute punishes the lewd exhibition of nudity, not just any exhibition of nudity, and the Virginia courts have consistently held that “lewd” entails more than simple nudity. See Frantz v. Commonwealth, 388 S.E.2d 273 (Va. Ct. App. 1990). Moreover, 18 U.S.C. §2252A(b)(1) does not require that the predicate conviction amount to “sexual abuse” or “abusive sexual conduct involving a minor.” Rather, a conviction qualifies as a predicate conviction merely if it relates to sexual abuse or abusive sexual conduct involving a minor or, indeed, even to child pornography. See 18 U.S.C. §2252A(b)(1).

Thus, the language of the Virginia statute and the fact of Colson’s conviction demonstrated categorically that Colson was convicted in 1984 of producing or attempting to produce lewd visual material, utilizing a minor to assume an erotic or provocative pose. A conviction on this conduct “relates to” the “physical or nonphysical misuse or maltreatment of a minor for a purpose associated with sexual gratification.” See Diaz-Ibarra, 522 F.3d at 352. Accordingly, Colson’s prior 1984 conviction under Virginia Code §18.2-374.1(B) categorically qualified as the type of conviction Congress sought to include as a predicate conviction within 18 U.S.C. §2252A(b)(1)’s broadly phrased sentencing enhancement.

Therefore, the judgment of the district court was affirmed.

Tax Law

Willful blindness

BOTTOM LINE: In defendants’ trial for tax evasion crimes, court’s provision of willful blindness instruction was not abuse of discretion because defendants denied knowledge of wrongdoing and evidence supported inference of deliberate ignorance on part of defendants, and content of instruction was proper as it plainly conveyed government’s burden to prove beyond reasonable doubt conduct that transcended recklessness and negligence.

CASE: U.S. v. Jinwright, No. 10-5289 (decided June 22, 2012) (Judges WILKINSON, Niemeyer & King). RecordFax No. 12-0622-60, 28 pages.

COUNSEL: Ann Hester, Federal Defenders of Western North Carolina, Inc., Charlotte, NC; Joshua Davey, McGuire Woods, Charlotte, ND, for Appellants. David Brown, Office of the United States Attorney, Charlotte, NC, for Appellee.

FACTS: Anthony and Harriet Jinwright were former co-pastors of a church in North Carolina. Mr. Jinwright had served as senior pastor since 1981. Mrs. Jinwright played an active role in church life during her husband’s ministry and began to draw a salary as a pastor of the church in about 2000. Over the course of their time with the church, the Jinwrights were co-chairs of the board of directors and served on a number of committees within the church, including those responsible for financial decisions. Mr. Jinwright had final authority over employee salaries and church finances more generally. The Jinwrights also received substantial income through speaking engagements outside their own church.

An investigation by the Internal Revenue Service revealed that the Jinwrights had understated their taxable income between 2002 and 2007, resulting in a tax deficiency of $664,352 for those years. The Jinwrights were subsequently charged with tax evasion. They were convicted of conspiracy to defraud the United States in violation of 18 U.S.C. §371, and of three counts of tax evasion for the years 2005-2007, and aiding and abetting the same, in violation of 26 U.S.C. §7201 and 18 U.S.C. §2. Mr. Jinwright was convicted (and Mrs. Jinwright acquitted) of three additional counts of tax evasion for the years 2002-2004, as well as six counts of filing a false tax return in violation of 26 U.S.C. §7206(1). The Jinwrights were also acquitted of several other charges not at issue in this appeal.

At sentencing, the district court determined that the Jinwrights had willfully omitted more than $3 million in taxable income from their joint returns, causing a tax loss to the United States and the State of North Carolina of approximately $1.3 million. The court applied applicable sentencing enhancements. Each defendant was sentenced within the calculated Guidelines range: Mr. Jinwright to 105 months’ imprisonment and restitution in the amount of $1,278,556, and Mrs. Jinwright to 80 months’ imprisonment and restitution in the amount of $1,174,921.

The Jinwrights appealed their convictions and sentences to the 4th Circuit, which affirmed the judgment of the district court.

LAW: Each of the crimes of which the Jinwrights were convicted required the government to prove that the defendants acted willfully. In light of the substantial evidence that the Jinwrights underreported their income from 2002 through 2007, the central dispute at trial concerned the Jinwrights’ knowledge of wrongdoing. On appeal, the Jinwrights argued that the trial evidence did not support the issuance of a willful blindness instruction and that the instruction misstated the legal standard of willful blindness.

Willful blindness instructions should be handled with caution. See United States v. Lighty, 616 F.3d 321, 366, 377 (4th Cir. 2010). In this case, the trial court issued such an instruction at the government’s request and over the Jinwrights’ objection. Willfulness with respect to tax crimes has been defined in essence as a knowledge requirement, or the “intentional violation of a known legal duty.” United States v. Pomponio, 429 U.S. 10, 12 (1976). When applied, the doctrine of willful blindness permits the government to prove knowledge by establishing that the defendant deliberately shielded himself from clear evidence of critical facts that are strongly suggested by the circumstances. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2069 (2011). Willful blindness may satisfy knowledge in a criminal tax prosecution, where the evidence supports an inference that a defendant was subjectively aware of a high probability of the existence of a tax liability, and purposefully avoided learning the facts pointing to such liability. United States v. Poole, 640 F.3d 114, 122 (4th Cir. 2011).

These conditions were satisfied here. Mr. Jinwright denied knowledge of his legal obligations and testified that he and Mrs. Jinwright did not know that their tax returns contained a deficiency. The government presented evidence to suggest that the defendants were aware of a “high probability” that they were understating their income to the IRS. In addition, the government introduced evidence indicating that the defendants purposely avoided learning the fact of their liability. In light of Mr. Jinwright’s denial of knowledge and the evidence supporting an inference of deliberate ignorance on the part of defendants, the court’s provision of a willful blindness instruction was not an abuse of discretion.

The content of the willful blindness instruction was also proper, as the instruction specifically admonished the jury that it was not enough to find that defendants were reckless or foolish in failing to recognize what was occurring, and that a showing of negligence was not sufficient to support a finding of willfulness or knowledge. The court properly cautioned the jurors that a willful blindness charge did not authorize them to find that the defendants acted knowingly because they should have known what was occurring, or that in the exercise of hindsight they should have known what was occurring. The trial court’s instruction was thus faithful to the willful blindness standard set forth in Global-Tech. Global-Tech, 131 S. Ct. at 2070. Thus, taken as a whole, the instruction plainly conveyed the government’s burden to prove beyond a reasonable doubt conduct that transcended recklessness and negligence. See United States v. Martin, 773 F.2d 579, 584 (4th Cir. 1985).

Accordingly, the judgment of the district court was affirmed.


Parol evidence

BOTTOM LINE: The parol evidence rule barred evidence of an alleged oral agreement between the county and an automobile salvage business, in which the county allegedly agreed to refrain from enforcing a written zoning consent order if certain conditions were met, because that evidence would directly contradict the plain and unamibuous language of the zoning consent order and the business did not show that the consent order was the product of fraud, duress, or mutual mistake.

CASE: Huggins v. Prince George’s County, No. 10-2366 (decided June 27, 2012) (Judges HAMILTON, Agee & Diaz). RecordFax No. 12-0627-, 22 pages.

COUNSEL: Matthew Sawchak, Ellis & Winters, LLP, Raleigh, NC, for Appellant. William Wilkins, Nexsen Pruet, LLC, Greenville, SC, for Appellees.

FACTS: Jane Huggins, trading as SADISCO of Maryland, brought the present civil action against Prince George’s County, Maryland and five County officials after the County shut down the salvage automobile wholesaling business operated by SADISCO on a parcel of land that SADISCO owned within the County. In November of 2001, SADISCO purchased a parcel of land in the County, with the intention of operating a salvage automobile wholesaling business on the property. This use was a permitted use within the industrial zones in which the parcel was located. The property directly abutted a portion of the southeastern fence line of Andrews Air Force Base, which the U.S. Environmental Protection Agency has on its Superfund list.

On December 20, 2001, SADISCO applied to the County for a use and occupancy permit in order to operate a salvage automobile wholesaling business on the property. SADISCO subsequently applied for a permit to temporarily house a construction trailer on the property, and the County issued it a permit to house a construction trailer on the property. At issue, however, was whether the County ever actually issued SADISCO a use and occupancy permit. Regardless, the record was undisputed that by the end of October of 2002, the County had legitimately revoked any and all outstanding permits that it had issued to SADISCO with respect to the property based upon SADISCO’s violation of numerous County Code provisions.

SADISCO nevertheless continued to operate its salvage automobile wholesaling business on the property and continued to perform grading work without applying for any required permits. Consequently, in May of 2003, the County filed two petitions in Maryland state court for injunctive relief, one based upon SADISCO’s grading permit violations and the other based upon SADISCO’s zoning code violations. On September 3, 2003, SADISCO and the County entered into two consent orders, a Zoning Consent Order and a Grading Consent Order. The County later granted SADISCO a series of requested extensions of the deadline for compliance with the terms of the Grading Consent Order based upon SADISCO’s representations that it was diligently working to meet such requirements. Eventually, however, the County notified SADISCO in writing that it intended to carry out enforcement of the Zoning Consent Order.

In April of 2004, County officials decided to enforce the Zoning Consent order. Until SADISCO obtained the necessary County permits, SADISCO would be allowed to access the property to remove cars and perform other tasks on the Property that would bring SADISCO into compliance. The County padlocked the property on April 28, 2004. In March of 2007, SADISCO filed the present civil action in the district court against the County and the County officials, individually and in their respective official capacities. The complaint alleged several claims, including breach of alleged oral contracts between the parties. The district court eventually granted summary judgment in favor of the County.

SADISCO appealed to the 4th Circuit, which affirmed.

LAW: SADISCO’s challenged the district court’s grant of summary judgment in favor of the County with respect to its claim that the County breached two alleged oral contracts. SADISCO contended that these oral contracts arose from two identical promises made by the County to forbear shutting down SADISCO’s salvage automobile wholesaling business on the Property, as long as SADISCO diligently pursued issuance of the necessary permits.

Between the written consent orders, SADISCO agreed to relinquish its rights and opportunities to defend itself in the two then-pending enforcement actions, to obtain a grading permit and an approved erosion and sediment control plan and to perform various work at the property within 60 days, and to vacate the premises within 90 days unless SADISCO obtained a valid use and occupancy permit. Under the orders, unless SADISCO took the corrective actions specified in the Zoning Consent Order within 90 days, the County possessed the authority to shut down SADISCO’s salvage automobile wholesaling business on the property until a valid use and occupancy permit was obtained and the costs of the suit were paid. Under Maryland law, the parol evidence rule barred admission of SADISCO’s evidence of a prior agreement to vary or contradict the terms of the written consent orders in an effort to establish that it gave consideration for the second-in-time alleged oral contract. Calomiris v. Woods, 727 A.2d 358, 361 (Md. 1999).

Here, pursuant to the written Zoning Consent Order, which predated the second alleged oral contract, SADISCO plainly and unambiguously agreed that if it did not take the corrective actions ordered in the Zoning Consent Order within 90 days of September 3, 1993, the County would have the authority to take all action necessary to enter onto the property to execute the order, and to remove the occupants and close down the operation of the business/use on the premises. The effect of SADISCO’s claim alleging breach of the second oral contract and its offer of deposition testimony and other various evidence in support was to directly contradict this plain and unambiguous language of the Zoning Consent Order. Because SADISCO did not show that it entered into the Zoning Consent Order because of fraud, duress, or by mutual mistake, the parol evidence rule applied to bar such efforts. Kasten Constr. Co. v. Rod Enterprises, Inc., 301 A.2d 12, 17 (1973).

As such, the district court properly granted summary judgment in favor of the County with respect to SADISCO’s claims of breach of two alleged oral contracts. Accordingly, the judgment of the district court was affirmed.