Reagan v. United States of America et al

Filing 32

ORDER ACCEPTING 26 Report and Recommendation of the magistrate judge and DENYING the motion for relief pursuant to 28 U.S.C. § 2255 (doc. 1). Signed by Judge Frederick J Martone on 3/14/12. (LSP)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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John E. Reagan,
Defendant-Movant,

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vs.

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United States of America,
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Plaintiff-Respondent.
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No. CV 10-01796-PHX-FJM
CR 01-01104-04-PHX-FJM
ORDER

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The court has before it defendant's motion to vacate, set aside, or correct sentence

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pursuant to 28 U.S.C. § 2255 (doc. 1), his memorandum in support (doc. 2), respondent's

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response (doc. 17), respondent's notice of supplemental authority (doc. 20), and defendant's

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reply (doc. 23). We also have the Report and Recommendation of the United States

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Magistrate Judge recommending that defendant's motion for relief be denied (doc. 26), and

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defendant's objections (doc. 31).

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Defendant was convicted of conspiracy, wire fraud, money laundering, and making

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false statements on April 20, 2004. The actions underlying his conviction related to

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defendant's attempts to defraud his employer, Boeing. He now asserts that his convictions

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for conspiracy and wire fraud are contrary to Skilling v. United States, 130 S. Ct. 2896

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(2010) and that he was denied the effective assistance of counsel.

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"A § 2255 movant procedurally defaults his claims by not raising them on direct

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appeal and not showing cause and prejudice or actual innocence in response to the default."

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United States v. Ratigan, 351 F.3d 957, 962 (9th Cir. 2003). "[T]o obtain collateral relief

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based on trial errors to which no contemporaneous objection was made, a convicted

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defendant must show both (1) 'cause' excusing his double procedural default, and (2) 'actual

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prejudice' resulting from the errors of which he complains." United States v. Frady, 456 U.S.

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152, 167-68, 102 S. Ct. 1584, 1594 (1982). "Cause" requires a showing of "some objective

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factor" which impeded compliance with a procedural rule, such as "a showing that the factual

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or legal basis for a claim was not reasonably available to counsel." Murray v. Carrier, 477

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U.S. 478, 488, 106 S. Ct. 2639, 2645 (1986). Prejudice requires "showing, not merely that

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the errors at his trial created a possibility of prejudice, but that they worked to his actual and

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substantial disadvantage, infecting his entire trial with error of constitutional dimensions."

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Frady, 456 U.S. at 170, 102 S. Ct. at 1596. There is a narrow exception to the cause and

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prejudice requirement "where a constitutional violation has probably resulted in the

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conviction of one who is actually innocent." Murray, 477 U.S. at 496, 106 S. Ct. at 2649.

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Actual innocence is established if a petitioner demonstrates that it is more likely than not that

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no reasonable juror would have convicted him, or he was convicted for conduct not

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prohibited by law. Alaimalo v. United States, 645 F.3d 1042, 1047 (9th Cir. 2011).

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II

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Defendant's first claim is that his conviction is contrary to Skilling v. United States,

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130 S. Ct. 2896 (2010). In Skilling, the United States Supreme Court narrowed the meaning

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of the honest services doctrine under 18 U.S.C. § 1346 to encompass only bribery or

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kickback schemes. Id. at 2930-31. Respondent contends that defendant procedurally

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defaulted his convictions for honest services fraud because he did not raise a legal challenge

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similar to that raised in Skilling. Even assuming defendant has shown cause for failing to

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raise a legal claim similar to that of Skilling during his trial or on direct appeal, he has not

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shown prejudice or actual innocence. The conduct underlying his conviction, taking

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kickbacks, is still a valid theory of honest services fraud after Skilling. See Skilling, 130 S.

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Ct. at 2931 ("§ 1346 criminalizes only the bribe-and-kickback core of the pre-McNally case
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law."). As a result, he is not entitled to relief on the merits of a Skilling claim.

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Defendant contends that the jury could have convicted him based on an interpretation

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of § 1346 which violates the holding of Skilling. The harmless error standard applies when

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a jury may have convicted on a legally invalid theory and a defendant challenges jury

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instructions in a § 2255 action. Skilling, 130 S. Ct. at 2934; United States v. Montalvo, 331

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F.3d 1052, 1058 (9th Cir. 2003). An error is harmless unless it "had substantial and injurious

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effect or influence in determining the jury's verdict." Hedgpeth v. Pulido, 555 U.S. 57, 58,

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129 S. Ct. 530, 531 (2008) (quoting Brecht v. Abrahamson, 507 U.S. 619, 623, 113 S. Ct.

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1710, 1714 (1993)).

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As the magistrate judge noted, "the government established Movant's guilt by

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participation in a bribery kickback scheme involving money and property, a theory of guilt

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clearly preserved in Skilling." Report and Recommendation at 19. The jury was instructed

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on a valid theory of guilt and sufficient evidence was presented to sustain a conviction. We

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conclude that the challenged instruction was harmless.

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III

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Defendant alleges that he was denied the effective assistance of counsel at his trial.

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To be entitled to relief on this ground, defendant must show that his counsel's performance

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was deficient and that this deficiency prejudiced his defense. Strickland v. Washington, 466

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U.S. 668, 687, 104 S. Ct. 2052, 2064 (1984). Deficiency is established by showing that

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"counsel's representation fell below an objective standard of reasonableness. . . . under

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prevailing professional norms." Id. at 688, 104 S. Ct. at 2064-65. To establish prejudice, a

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"defendant must show that there is a reasonable probability that, but for counsel's

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unprofessional errors, the result of the proceeding would have been different." Id. at 694,

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104 S. Ct. at 2068. "Review of counsel's performance is highly deferential and there is a

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strong presumption that counsel's conduct fell within the wide range of reasonable

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representation." United States v. Ferreira-Alameda, 815 F.2d 1251, 1253 (9th Cir. 1986).

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The basis for this claim is counsel's alleged failure to review all documents underlying

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the Burnison Report before trial.1 Defendant pursued this theory in his motion for new trial

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and his direct appeal. "Issues disposed of on a previous direct appeal are not reviewable in

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a subsequent § 2255 proceeding." United States v. Currie, 589 F.2d 993, 995 (9th Cir. 1979).

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Defendant also claims that counsel failed to effectively cross-examine the report's

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author, Mr. Burnison. At an evidentiary hearing on his motion for new trial, defense witness

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David Hagstrom (a Boeing employee previously supervised by co-defendant Buckner)

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testified that there were legitimate reasons why the zero line items went out at no charge.

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Defendant argued that Hagstrom's investigation of the report undermined its credibility and

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his counsel was deficient by not going through the Burnison report and supporting

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documentation before trial. However, defendant fails to establish that any prejudice resulted

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from his counsel's actions. The trial court concluded that the documents, "with possibly three

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minor exceptions in more than a hundred instances, fully supported the Burnison Report."

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(Doc. 17, tab 5 at 112). Defendant is not entitled to relief on this claim.
IV

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IT IS THEREFORE ORDERED accepting the recommendation of the magistrate

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judge (doc. 26) and DENYING the motion for relief pursuant to 28 U.S.C. § 2255 (doc. 1).

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DATED this 14th day of March, 2012.

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Boeing employee Mark Burnison prepared a report for the government's use at trial
which showed sales orders with zero line items (items included in the order without a price).
By comparing this data with the price at which the items should have been billed, Mr.
Burnison suggested that two Boeing Service Centers received free product totaling over $1
million.
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