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VOLUME 231—NO. 104 TUESDAY, JUNE 1, 2004 WHITE-COLLAR CRIME

BY ROBERT G. MORVILLO AND ROBERT J. ANELLO Allowing Use of Proffer Statements at Trial

he “proffer” session is a method by based on the uneven relationship between the which the subject of an investiga- person making a proffer and the prosecutor; tion conveys information directly and/or (3) that the agreement violates “Sixth to the prosecution to either Amendment rights to make a defense [at trial] T and to have the effective assistance of counsel establish the value of his or her cooperation or to render explanations of conduct designed to in making that defense.”6 preclude prosecution. It is a valuable tool In its 1995 decision in United States v. Mezzanatto,7 the U.S. Supreme Court, in an for the prosecution, as it allows a first-hand Robert G. Morvillo Robert J. Anello assessment of the credibility of the person opinion by Justice Clarence Thomas, held proffering as well as his or her story. What is connection with any sentencing proceeding1 that, per the agreement so providing, the unclear is whether proffers represent the best but may use the proffered statements to government could use a defendant’s statements way for a subject to convey information to the pursue leads and to impeach subsequent during plea discussions to impeach him where prosecution for several reasons. First, 18 testimony. In recent years, prosecutors in the the defendant himself testified at trial in a U.S.C. §1001 applies to the session and Southern and Eastern Districts have expand- manner inconsistent with those statements. prosecutors seem to be prone to utilizing that ed the terms of the agreement to allow the statute whenever they believe they have government to use the statements to rebut United States v. Mezzanatto been lied to. Second, the proffer session is now any evidence or arguments offered by or on conducted under a written agreement that is behalf of the defendant.2 Thus, those who The Court held that, “absent some affirma- so one-sided that it provides little protection agree to participate in a proffer session are tive indication that the agreement was against the use of the statement against required to waive their rights under Rule 410 entered into unknowingly or involuntarily, an the person proffering if no deal is struck and of the Federal Rules of Evidence, which agreement to waive the exclusionary provi- prosecution follows. prevents the use of proffer statements at trial sions of [Rule 11(e)(6)(D) of the Federal against the person who made them.3 This Rules of Criminal Procedure and Rule 410] is ‘Queen for the Day’ Agreements provision has made most defense practition- valid and enforceable.”8 In response to an ers uncomfortable and, as a result, has been argument based on the unequal bargaining The standard proffer agreements offered by challenged when invoked by the government power of prosecutors and people engaging in the U.S. Attorney’s Offices for the Southern at trial. With the Second Circuit’s decision proffer negotiations, the Supreme Court stat- and Eastern Districts of New York, also earlier this year in United States v. Veleziv4 ed, “[t]he mere potential for abuse of prosecu- known as “Queen for a Day” agreements, and an opinion issued by a Southern District torial bargaining power is an insufficient basis traditionally have provided that the judge just days later, United States v. Parra,5 for foreclosing negotiation altogether.” In a government agrees not to offer any of the defendants will have a harder time challeng- concurring opinion, three Justices noted that proffered statements in its case-in-chief or in ing that waiver provision. the case was about using proffer statements for The argument against the enforceability of impeachment only and warned that “a waiver Robert G. Morvillo and Robert J. the waiver provision typically is (1) that to use such statements in the case in chief Anello are partners at Morvillo, Abramowitz, the proffer agreement was not entered into would more severely undermine a defendant’s Grand, Iason & Silberberg. Elizabeth J. knowingly and voluntarily; (2) that the incentive to negotiate and thereby inhibit Carroll, an attorney, assisted in the preparation agreement is unconscionable or otherwise plea bargaining.” of this article. unenforceable-a contract law argument often Until a couple of years ago, the law in this NEW YORK LAW JOURNAL TUESDAY, JUNE 1, 2004

circuit concerning whether Rule 410 could be “line-drawing” concerns as well. While the and defendants did not trouble Judge Chin. waived in proffer agreements tended to favor defendant’s attorney, the court found, would While the court admitted that the government defendants. The Second Circuit seized on the not be required “to sit silently at trial,” the “does have significant bargaining power in “knowing and voluntary” standard in waiver provision “does prevent him from these situations,” it claimed that that is Mezzanatto one year later in United States v. making any sort of meaningful defense” since because the government “has substantial Ready.9 Ready involved a waiver in a plea “any affirmative theory of factual innocence… evidence to prove the defendant’s guilt.” A dis- agreement (not a proffer agreement) of the would permit the government to offer [the] parity based in the defendant’s guilt “is no basis right to appeal, not of rights under Rule 410. proffer.” The court also addressed concerns for holding the agreement unenforceable.” But the court’s language is applicable to the based in contract law; after noting that the The Gomez court also relied on the policy waiver of other “essential rights”10: courts must “awesome” disparities between prosecutor and argument that “plea bargaining and coopera- “scrutinize waivers closely,” i.e., “assure that the defendant “are not diminished merely because tion should be encouraged.” If proffer agree- waiver … is knowing and voluntary,” and a defendant is executing a proffer agreement ments are not enforced, the court reasoned, “apply them narrowly … using applicable prin- rather than a plea agreement.” The court prosecutors will be reluctant to enter into ciples of contract law.” The Ready court also found that the waiver provision at issue cooperation agreements because they will not noted that “the Government ordinarily has cer- “exploits this power imbalance.” have assurance that the defendant will tell the tain awesome advantages in bargaining power.” truth. Finally, the court addressed the Quoting extensively from Ready, Southern The Tide Turns Constitutional and practical concerns raised District U.S. District Judge William Pauley, in United States v. Gomez,13 a Southern in Duffy. “Defense counsel,” the court United States v. Lauersen11 found that the District case decided in 2002, was the first sign claimed, “are able to put on a meaningful defendant there had not “knowingly waived that the courts in this Circuit might follow the defense without opening the door to the her rights as to the admissibility of statements leads of other Circuits addressing this issue 14 admission of proffer statements” and may made during her proffer for purposes beyond and not continue to find fault with the waiver even present evidence inconsistent with a impeachment,” including “to ‘rebut’ evidence provision allowing the government to use defendant’s proffer statements. If they do so, or arguments presented on her behalf.” The proffer statements to rebut the defendant’s however, “it is only fair that the Government facts in Lauersen established that though case. In Gomez, Southern District Judge then be permitted to present the defendant’s the defendant had been advised that her Denny Chin took a somewhat literal contract- own words in rebuttal.” statements could be used to pursue leads and law based approach, rejecting what the defen- In United States v. Velez, the U.S. Court of impeach her, neither the defendant’s attorney dant in Gomez referred to as the “bright-line Appeals for the Second Circuit considered the nor the prosecutor had given the defendant rule” of Duffy. “To the contrary,” Judge Chin validity of a waiver provision “identical to the any explanation of the portion of the agree- wrote, “I hold that where a proffer agreement one” in Gomez and reached an identical result, ment regarding the ability of the government is entered knowingly and voluntarily and its adopting almost identical reasoning.15 After to use her statements to rebut positions she terms are clear and unambiguous…it is reviewing Mezzanatto, Duffy, and Gomez, the might adopt at trial. enforceable, at least to the extent that the court “respectfully decline[d] to adopt the The defendant in United States v. Duffy12 Government may use the defendant’s proffer position advanced in Duffy, and… note[d] secured an even more definitive victory in the statements to rebut evidence or arguments with approval the recent, contrasting opinion Eastern District, where Judge Nina Gershon — offered on his behalf at trial, even where he in” Gomez. Quoting extensively from that with a focus on the Sixth Amendment — used does not testify.” opinion, the Second Circuit adopted Judge strong language to strike down the U.S Judge Chin reasoned that a “proffer Chin’s contract law and policy arguments, and Attorney’s Office’s standard waiver provision agreement is a contract that should be also noted, like Judge Chin, that “a defendant allowing the government to use the defendant’s enforced in accordance with principles of remains free to present evidence inconsistent proffer statements “to rebut any evidence contract law.” The “parties should be held to with his proffer statements, with the fair con- offered or elicited, or factual assertions made, by the terms of their agreement,” which provides sequence that, if he does, ‘the Government [is] or on behalf of” the defendant. Without reach- a benefit to both: the defendant gets an then…permitted to present the defendant’s ing the question of whether the defendant’s opportunity to be heard and may receive a own words in rebuttal.’ ” waiver was knowing and voluntary, the court, substantial downward departure in sentenc- In a nod to Duffy, the Velez court stated that relying on the Sixth Amendment, found ing; in return, he must be truthful. “Fairness it “do[es] not lightly dismiss the observation in that the provision caused the defendant to requires,” the court went on, “that he be held Duffy that the Government holds significant “effectively forfeit[] fundamental aspects of his to that agreement” because “[i]f the proffer bargaining power in arranging proffer sessions rights to make a defense at trial and to the agreement is not enforced, a defendant will and securing a waiver provision as a prerequi- effective assistance of counsel at trial.” have less incentive to be truthful.” site for a defendant’s participation.” But the Judge Gershon expressed practical and The relative disparity between prosecutors court agreed with the Mezzanatto language that NEW YORK LAW JOURNAL TUESDAY, JUNE 1, 2004

“[t]he mere potential for abuse of prosecutorial legal explanations, warnings, and technicali- 2001). Perjury, obstruction of justice and false statements bargaining power is an insufficient basis for ties, perhaps making it less clear.” The court prosecutions are always excepted from these provisions. foreclosing negotiation altogether” and took then observed that the defendant’s mistake of 3. Rule 410 provides that “any statement made in the Judge Chin’s position that any disparity “is fact argument-that he assumed that by signing course of plea discussions with an attorney for the pros- likely attributable to the Government’s the proffer he was going to reduce his ecuting authority which do not result in a plea of guilty evidence of the defendant’s guilt.” jail time-”simply restates in contract law or which result in a plea of guilty later withdrawn” is Just one week after the Velez decision, terms his argument that he did not knowing- inadmissible “against the defendant who made the plea Southern District Judge Peter Leisure issued ly and voluntarily waive his rights.” or was a participant in the plea discussions.” an opinion in United States v. Parra revisiting Defendant’s lack of consideration argu- 4. 354 F3d 190 (2d Cir. 2004). the waiver issue. Though the court recognized ment was the most interesting to Judge 5. 302 FSupp 2d 226 (SDNY 2004). that “Velez upholds the Proffer Agreement Leisure, who noted that “the Court has not 6. United States v. Duffy, 133 FSupp2d 213. not only against constitutional challenges, found any case that has addressed the issue of 7. 513 US 196 (1995). but also against…arguments… grounded in consideration in a proffer agreement.” 8. The Court’s reference to these rules reflects the contract law,” the court nonetheless laid out Defendant’s argument was that, though the fact that Fed R Crim P 11(e)(6)(D) previously con- in detail the contract law arguments concern- government admittedly had conferred a tained language substantively identical to Rule 410 of ing Rule 410 waiver provisions as none of the benefit on him by meeting with him, the the FRE; Rule 11 underwent an amendment in 2002, prior courts in the Circuit had. proffer agreement itself does not state which eliminated Rule 11(e)(6)(D) and added Rule The court first found that the defendant — the benefit of the bargain offered by the 11(f), which simply cross-references Rule 410 of the whose attorney had reviewed the terms of government and therefore the agreement FRE the proffer agreement with him before they should be invalidated because the lack of 9. 82 F3d 551 (2d Cir 1996). signed it (as had the Assistant U.S. Attorney at consideration renders it unconscionable. 10. United States v. Duffy, 133 FSupp2d 213; see United the proffer session) — had knowingly and After pointing out that “[j]udges in this States v. Lauersen, No. 98CR1134, 2000 WL 1693538 voluntarily waived the provisions of Rule 410.16 Court have found uniformly that a defendant (SDNY Nov. 13, 2000) (interpreting Ready). It was not necessary, the court held, for the receives something of value by signing the 11. 2000 WL 1693538. government to prove that it had used “layman’s form proffer agreement” — the “opportunity 12. 133 F Supp2d 213. terms” in explaining the agreement; “but only to be heard”17 — Judge Leisure concluded 13. 210 FSupp2d 465 (SDNY 2002). that defendant understood the Agreement’s that the agreement did make a statement 14. See United States v. Krilich, 159 F3d 1020 (7th Cir terms so that he could knowingly decide that, though “minimal … sufficiently memo- 1998), cert. denied, 528 US 810 (1999); United States v. whether to sign” it. rializes the benefit the government confers.” Burch, 156 F3d 1315 (DC Cir1998), cert. denied, 526 US In addressing the defendant’s next claim, The agreement stated, “[t]he Client has 1011 (1999). that “some or all of the form proffer agreement agreed to provide the Government with 15. Prior to Velez, at least two other Southern District is void in every case because it violates information, and to respond to questions, judges had agreed with the Gomez analysis as well; see principles of contract law,” the court noted that so that the Government may evaluate United States v. Avendano, No. 02 CR. 1059, 2003 WL those principles require that “courts construe Client’s information and response in making 22454664 (SDNY Oct. 29, 2003) (Swain, J.); United ambiguities in proffer agreements against prosecutive decisions.” States v. Chen Xiang, No. S102CR271, 2003 WL the drafter, the government” and “apply It is our view that lawyer’s proffers are far 21180400 (SDNY May 20, 2003) (Casey, J.), as had at fairness principles to the terms of the proffer safer than client proffers. Client proffers least two Eastern District judges, see United States v, agreement.” The court then knocked down should be avoided if a possibility of trial exists Maynard, 232 F. Supp 2d 38 (EDNY) (Weinstein, J.); each of the defendant’s three contract law because the proffer agreement substantially United States v. Calvin Johnson, 02 CR 259, slip op. arguments: that the terms of the proffer restricts the ability to defend. (EDNY 2002) (cited in Maynard). agreement are ambiguous; that the agreement is 16. The court distinguished Lauersen and Avendano void for unilateral mistake of fact; and that the ••••••••••••••••••••••••••••••• cases where the court found the waiver was knowing and agreement is void for lack of consideration. 1. This article discusses the use of proffer statements at voluntary based on weaker evidence than that in Parra. Finally, the court found that broad use of trial. For cases on the use of proffer statements at sentenc- 17. Citing Gomez (Chin, J.) and Chaparro (Cote, J.). the government’s proffer agreement does not ing, see United States v. Fagge, 101 F3d 232 (2d Cir 1996); violate public policy. United States v. Chaparro, 181 FSupp2d 323 (SDNY 2002); This article is reprinted with permission from the In finding the agreement “clear and United States v. Doe, No. 96 CR 749, 1999 WL 243627 June 1, 2004 edition of the NEW YORK LAW unambiguous,” the court concluded that “the (EDNY 1999). JOURNAL. © 2004 ALM Properties, Inc. All rights reserved. Further duplication without permission is government need not define every word in 2. See, e.g., provisions at issue in United States v. Velez, prohibited. For information, contact American the proffer agreement it drafts” as “[t]o do so 354 F3d 190 (2d Cir 2004) (Southern District provision), Lawyer Media, Reprint Department at 800-888-8300 would burden the proffer agreement with and in United States v. Duffy, 133 FSupp2d 213 (EDNY x6111. #070-06-04-0033