Jury May Have Relied on This Evidence to Convict Howard for Count 5 Under

738 517 FEDERAL REPORTER, 3d SERIES jury may have relied on this evidence to concluded that defendants’ actions de- convict Howard for Count 5 under a con- prived the banks of money or property. spiracy theory, that a coconspirator not The courts also gave the erroneous in- under Howard’s control actually made the struction that the jury could find the de- false entries in the books and records. fendants guilty of bank fraud if the defen- The government next argues that since dants’ actions deprived the banks of the Howard only challenges his conviction un- right to honest services. This Court found der Count 5 because of the Pinkerton in- harmless error in both cases because the struction that links Count 1 to Count 5, inevitable result of the scheme proved at and because Howard failed to object to the trial was defrauding the banks of property Pinkerton instruction at trial, we should interests, a valid theory of conviction. See review under the plain error standard. Saks, 964 F.2d at 1521; Holley, 23 F.3d at We disagree. The Pinkerton instruction is 910. a correct statement of the law and had For reasons discussed above, the record factual support from the record. Thus, in this case persuades us that a reasonable there was no basis for objection at the jury could have based its conviction on the time the charge was given, considering the tainted conspiracy charge plus evidence conspiracy evidence produced by the gov- that the false entries were made not by or ernment. Additionally, Howard did object at the direction of Howard but by a cocon- to the ‘‘honest services’’ instruction, which spirator. It necessarily follows that unlike at bottom is the legal impediment to his in Saks and Holley, Howard’s conviction conviction. on Count 5 predicated on a legally valid The government argues, finally, that theory was not inevitable. even if the jury relied on the conspiracy avenue from Count 1 to convict Howard on III. Count 5, it was harmless error. The government argues, here, that a conviction for For the reasons stated above, the dis- conspiracy to commit the falsification of trict court order to vacate Count 5 is af- books and records in Count 5 necessarily firmed. would also require the conclusion that Howard directly participated in those acts. AFFIRMED. The government relies on two cases— United States v. Saks, 964 F.2d 1514 (5th Cir.1992), and United States v. Holley, 23 F.3d 902 (5th Cir.1994)—for the proposi- tion that this Court has found legally erro- , neous jury instructions harmless in fraud cases when the inevitable result of the fraudulent activity proved at trial estab- lished that the defendants participated in the scheme that justified their convictions on legally correct instructions. In both Saks and Holley, defendants were charged with bank fraud. The district courts gave RELIABLE CONSULTANTS, INC., do- the correct jury instruction that the jury ing business as Dreamer’s and Le could find the defendants guilty if they Rouge Boutique, Plaintiff–Appellant, RELIABLE CONSULTANTS, INC. v. EARLE 739 Cite as 517 F.3d 738 (5th Cir. 2008) PHE, Inc., doing business as Adam 1. Federal Courts O776, 794 and Eve, Inc., Intervenor– Court of Appeals reviews district Plaintiff–Appellant, court’s dismissal of complaint as failing to state a claim de novo, accepting all well- v. pleaded facts as true, and viewing them in Ronnie EARLE, in his official capacity light most favorable to plaintiff. only, Travis County District Attorney, 2. Federal Civil Procedure O1772 Defendant–Appellee, In order for complaint to survive motion to dismiss for failure to state claim, State of Texas, Intervenor– plaintiff must plead enough facts to state a Defendant–Appellee. claim to relief that is plausible on its face. Fed.Rules Civ.Proc.Rule 12(b)(6), 28 No. 06–51067. U.S.C.A. United States Court of Appeals, 3. Constitutional Law O889 Fifth Circuit. Businesses that sold sexual devices for profit had standing to raise constitutional Feb. 12, 2008. rights of their customers in challenging, as Background: Businesses that sold sexual violative of customers’ substantive due pro- devices for profit filed suit challenging, on cess right to engage in private intimate First and Fourteenth Amendment conduct of their choosing, a Texas statute grounds, a Texas statute that, in essence, which, in essence, criminalized the selling, criminalized the selling, advertising, giving advertising, giving or lending of any device or lending of any device designed or mar- designed or marketed for sexual stimu- keted for sexual stimulation, unless defen- lation, unless defendant could prove that dant could prove that device was sold, device was sold, advertised, given or lent advertised, given or lent for statutorily- for statutorily-approved purpose. approved purpose. The United States Dis- U.S.C.A. Const.Amend. 14; V.T.C.A., Penal trict Court for the Western District of Code §§ 43.21, 43.23. Texas, Lee Yeakel, J., entered order dis- 4. Constitutional Law O4509(20) missing complaint as failing to state claim Obscenity O2.5 for relief, and businesses appealed. Texas statute which, in essence, crimi- Holdings: The Court of Appeals, Reavley, nalized the selling, advertising, giving or Circuit Judge, held that: lending of any device designed or marketed for sexual stimulation, unless defendant (1) businesses had standing to raise consti- could prove that device was sold, adver- tutional rights of their customers; and tised, given or lent for statutorily-ap- (2) statute impermissibly burdened cus- proved purpose, impermissibly burdened tomers’ substantive due process right the substantive due process rights of cus- to engage in private intimate conduct tomers of businesses that sold such de- of their choosing. vices to engage in private intimate conduct of their choosing; neither state’s interest Reversed and remanded. in discouraging prurient interests in auton- Rhesa Hawkins Barksdale, Circuit Judge, omous sex and the pursuit of sexual grati- concurred in part and dissented in part fication unrelated to procreation, nor its and filed opinion. interest in protecting children from im- 740 517 FEDERAL REPORTER, 3d SERIES proper sexual expression or desire to pro- Elaine Agnes Casas, Jennifer Kraber, tect ‘‘unwilling adults’’ from exposure to Austin, TX, for Earle. sexual devices, was sufficient to justify its Bill L. Davis (argued), Austin, TX, for heavy-handed restriction, not only on sale State of Texas. and advertisement, but upon giving or lending of such devices. U.S.C.A. Const. Appeal from the United States District Amend. 14; V.T.C.A., Penal Code §§ 43.21, Court for the Western District of Texas. 43.23. 5. Constitutional Law O4450 Before REAVLEY, BARKSDALE and Individual decisions, by either married PRADO, Circuit Judges. or unmarried persons, concerning the inti- macies of their physical relationship, even REAVLEY, Circuit Judge: when not intended to produce offspring, This case assesses the constitutionality are a form of ‘‘liberty’’ protected by the of a Texas statute making it a crime to Due Process Clause of the Fourteenth promote or sell sexual devices. The dis- Amendment. U.S.C.A. Const.Amend. 14. trict court upheld the statute’s constitu- See publication Words and Phras- tionality and granted the State’s motion to es for other judicial constructions dismiss for failure to state a claim. We and definitions. reverse the judgment and hold that the 6. Constitutional Law O4450, 4509(23) statute has provisions that violate the Public morality cannot justify a law Fourteenth Amendment of the U.S. Con- that regulates private sexual conduct prostitution. tected by the Due Process Clause of the Fourteenth Amendment, and that does not I. The Statute relate to prostitution, potential for injury The forerunner of Texas’s obscenity or coercion, or public conduct. U.S.C.A. statute was enacted in 1973 and had the Const.Amend. 14. modest goal of prohibiting ‘‘obscene material.’’1 Six years later, the legislature re- West Codenotes defined ‘‘obscene material’’ so that it would Held Unconstitutional track the Supreme Court’s definition of V.T.C.A., Penal Code § 43.21 obscenity detailed in Miller v. California.2 V.T.C.A., Penal Code § 43.23 That same year, the legislature also ex- panded the scope of the statute so that it would prohibit the ‘‘promotion’’ and ‘‘wholesale promotion’’ of ‘‘obscene devices,’’ which includes selling, giving, lending, distributing, or advertising for them.3 H. Louis Sirkin (argued), Jennifer Marie The legislature chose to broadly define Kinsley, Sirkin, Pinales & Schwartz, LLP, ‘‘obscene device,’’ not using the Miller test, Cincinnati, OH, for Plaintiff–Appellant. but as any device ‘‘designed or marketed 1. Tex. Penal Code Ann. §§ 43.21–.23 (Vernon Miller v. California, 413 U.S. 15, 23–25, 93 1973). S.Ct. 2607, 2614–16, 37 L.Ed.2d 419 (1973)). 2. Tex. Penal Code Ann. § 43.21 (Vernon 3. Id. §§ 43.21(a)(5), (6). 1979) (defining ‘‘obscene material’’ in relation to the three-part ‘‘obscenity’’ test set forth in RELIABLE CONSULTANTS, INC. v. EARLE 741 Cite as 517 F.3d 738 (5th Cir. 2008) as useful primarily for the stimulation of pi,8 Alabama,9 and Virginia.10 The Missis- human genital organs.’’4 In 1985, the Tex- sippi supreme court has upheld its state’s as Court of Criminal Appeals held that the statute against First and Fourteenth statute did not violate an individual’s right Amendment challenges.11 Neither the to privacy, concluding that there was no Alabama nor Virginia supreme court has constitutional right to ‘‘stimulate TTT

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