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United States v. Ferguson

United States District Court, E.D. Tennessee, Greeneville Division

January 30, 2018



          Clifton L. Corker United States Magistrate Judge.

         All pretrial motions have been referred to the undersigned pursuant to 28 U.S.C. 636(b) for disposition or a report and recommendation regarding disposition by the District Court as appropriate. Defendant, Matthew Martland, filed a Motion for Severance of Defendants at Trial [Doc. 91]. The Government responded [Doc. 111]; Martland submitted a reply [Doc. 122].

         The Court granted the motions of Lee Ferguson and Kerry Ferguson to join the motion. [Docs. 95, 96, 100 & 101]. The Court conducted a pretrial conference on November 21 and December 4, 2017. Assistant United States Attorneys David Gunn and Timothy Harker appeared for the Government. The moving Defendants and their counsel were present. The parties declined to present evidence or testimony on the motion but intended to submit late-filed materials in support of severance, specifically law enforcement interview memos [Doc. 143, pp. 326-27, Doc. 142]. Defendants Lee Ferguson and Kerry Ferguson orally withdrew their severance motions at the end of the December 4, 2017, pretrial conference [Doc. 143, pp. 328-29]. Accordingly, their motions to sever will be denied as moot.

         I. Background and Parties' Positions

         Defendants are former employees of Wellco Enterprises, Inc., a now defunct manufacturer and supplier of military and rugged footwear that sold such footwear to the United States and the public [Docs. 36, 81]. The Superseding Indictment alleges Defendants conspired to commit and committed wire fraud, defrauded the United States, and smuggled goods into the United States by importing military-style boots that were made in China. It also alleges deceptive marketing and sale of the boots as “Made in the USA” and compliant with the Trade Agreements Act of 1979, 19 U.S.C. § 2501 et seq. and the Berry Amendment, 10 U.S.C. § 2533a [Id.].

         Martland moves the Court to sever his trial on the basis that he will be prejudiced by the spillover effect of evidence that incriminates his co-Defendants, the familial relationship among several co-Defendants and mutually antagonistic defenses. He also argues that severance is warranted to ensure preservation of his rights under the Sixth Amendment Confrontation Clause and applicable case law such as Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968) and Crawford v. Washington, 541 U.S. 36, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004).

         The Government responds that the Sixth Circuit favors joint trials for several reasons, including promotion of economy and justice and avoidance of inconsistent verdicts. The Government asserts a risk of prejudice is low as juries are presumed capable of parsing through the evidence and considering each indictment count and defendant. It argues severance is unnecessary because of a risk of spillover or antagonistic defenses, the alleged conspiracy role was minor, or the evidence against other defendants is more damaging. Finally, the Government contends that statements made during and in furtherance of a conspiracy do not raise Confrontation Clause issues while issues arising from testimonial statements can be addressed via redaction.

         II. Analysis

         A. Applicable Law

         Federal Rules of Criminal Procedure 8(b) and 14(a) govern joinder and severance. Rule 8(b) provides for joinder: “The indictment or information may charge 2 or more defendants if they are alleged to have participated in the same act or transaction, or in the same series of acts or transactions, constituting an offense or offenses. The defendants may be charged in one or more counts together or separately. All defendants need not be charged in each count.” Joinder of a set of acts or transactions is appropriate when they are “logically interrelated” or form “part of a common scheme or plan.” United States v. Beverly, 369 F.3d 516, 522 (6th Cir. 2004). Similarly, “joint trials conserve [public] funds, diminish inconvenience to witnesses and public authorities, and avoid delays in bringing those accused of crime to trial.” United States v. Lane, 474 U.S. 438, 449, 106 S.Ct. 725, 732, 88 L.Ed. 814 (1986) (citation omitted). Additionally, “[j]oint trials generally serve the interests of justice by avoiding inconsistent verdicts and enabling more accurate assessment of relative culpability.” Richardson v. March, 481 U.S. 200, 210, 107 S.Ct. 1702, 1709, 95 L.Ed.2d 176 (1987). Thus, “[t]here is a preference in the federal system for joint trials.” Zafiro v. United States, 506 U.S. 534, 537, 113 S.Ct. 933, 937, 122 L.Ed.2d 317 (1993).

         In United States v. Harris, 9 F.3d 493, 500 (6th Cir. 1993), the Sixth Circuit noted that, in general, “persons indicted together should be tried together.” To do otherwise would create problems for the justice system since “[s]eparate trials produce additional labor for judges and juries, which results from the unnecessary repetition of evidence and trial procedures.” United States v. Caver, 470 F.3d 220, 238 (6th Cir. 2006). Therefore, the “predominant consideration is whether joinder would serve the goals of trial economy and convenience; the primary purpose of this kind of joinder is to ensure that a given transaction need only be proved once.” United States v. Swift, 809 F.2d 320, 322 (6th Cir. 1987) (quotation omitted).

         Rule 14(a) creates an exception to Rule 8(b): “[i]f joinder of offenses or defendants in an indictment . . . appears to prejudice a defendant or the government, the trial court may . . . sever the defendants.” The rule “comes into play if joinder was initially proper under Rule 8 but a joint trial would prejudice one or more defendants.” United States v. Lloyd, 10 F.3d 1197, 1215 (6th Cir. 1993). Ordinary prejudice that is inherent in any joint trial does not mandate severance. It is only required when “there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants or prevent the jury from making a reliable judgment about guilt or innocence.” Zafiro, 506 U.S at 539; 113 S.Ct. 933. Thus, “a defendant seeking severance at trial bears a strong burden and must demonstrate substantial, undue, or compelling prejudice.” Caver, 470 F.3d at 238 (quoting United States v. Davis, 177 F.3d 552, 558 (6th Cir. 1999)).

         Rule 14(a) severance motions fall under the “sound discretion” of the district court. Zafiro, 506 U.S. at 541, 113 S.Ct. 933. Courts have typically exercised discretion by refusing to grant severance on the grounds that: (1) a defendant might have a better chance for acquittal if tried separately, (2) the co-defendants had different levels of culpability than the defendant seeking severance, (3) there might be hostility or a conflict of interest between the defendants, or (4) evidence may be admissible against one defendant but not against the others. See 1A Charles Alan Wright et al., Federal Practice and Procedure, § 223 (4th ed. 2015); United States v. Gardiner, 463 F.3d 445, 473 (6th Cir.2006); Lloyd, 10 F.3d at 1215. Ultimately, “[t]he risk of prejudice will vary with the facts in each case, ” and “less drastic measures, such as limiting instructions, often will suffice to cure any risk of prejudice.” Zafiro, 506 U.S. at 539, 113 S.Ct. 933; see also Swift, 809 F.2d at 323 (“[A] jury is presumed capable of sorting out evidence and considering each count and each defendant separately”).

         B. Determination Whether Severance is Warranted

         1. Spillover Evidence

         a. Martland's ...

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