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Scrushy Brief Case: 12-10694 Date Filed: 04/09/2012 Page: 1 of 70 Case No. 12-10694 District Court Case No. 2:05-CR-119-MEF IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT UNITED STATES OF AMERICA, Appellee-Plaintiff, v. RICHARD SCRUSHY, Appellant-Defendant. On Appeal from the United States District Court for the Middle District of Alabama BRIEF OF APPELLANT RICHARD M. SCRUSHY __________________________________________________________________ Arthur W. Leach James K. Jenkins Suite 225 MALOY JENKINS PARKER 5780 Windward Parkway 900 Arapahoe Avenue Alpharetta, Georgia 30005 Boulder, Colorado 80302 404-786-6443 303-443-9048 Leslie V. Moore Suite 204 5148 Caldwell Mill Road Birmingham, Alabama 35244 205-403-9116 Case: 12-10694 Date Filed: 04/09/2012 Page: 2 of 70 USA v. Scrushy Case No. 12-10694 Certificate of Interested Persons And Corporate Disclosure Statement Pursuant to Eleventh Circuit Rule 26.1, Appellant Richard M. Scrushy certifies that the following persons have an interest in the outcome of this case: Honorable Charles S. Coody, United States Magistrate Judge Louis V. Franklin, Sr., Acting United States Attorney Honorable Mark E. Fuller, Chief Judge, Middle District of Alabama Honorable Robert L. Hinkle, District Judge, Northern District of Florida James K. Jenkins, Attorney for Richard Scrushy Arthur W. Leach, Attorney for Richard Scrushy Leslie V. Moore, Attorney for Richard Scrushy Richard C. Pilger, Department of Justice, Public Integrity Section John Alexander Romano, Department of Justice, Appellate Section Don Eugene Siegelman, Co-Defendant in trial court Peter L. Sissman, Attorney for Don Siegelman Morgan Stanley (symbol MS) Patty Merkamp Stemler, Department of Justice, Appellate Section UBS AG (symbol UBS) C-1 of 1 Case: 12-10694 Date Filed: 04/09/2012 Page: 3 of 70 Statement Regarding Oral Argument Appellant Richard Scrushy respectfully requests oral argument. This case involves the denial of a motion to recuse based on ex parte meetings between the trial judge and members of the United States Marshals Service and the Postal Inspector where there is no full disclosure on the record of the basis for disqualification. During the second ex parte meeting, the court was informed of the results of an investigation concluding that documents central to a motion then pending before the court were not authentic. This appeal also presents issues relating to the scope of discovery in a motion for new trial based on newly discovered evidence and the denial of an evidentiary hearing on the motion for new trial. These latter two issues arise in the context of an extensive evidentiary showing (including 73 exhibits) as to documents, e-mails and investigative reports that are likely to exist and are in the exclusive custody of the Government. Oral argument would enable counsel to assist the Court in identifying the portions of the record that are important to these determinations, as well as assist the Court in determining if the court below applied the correct legal standards in determining these motions. i Case: 12-10694 Date Filed: 04/09/2012 Page: 4 of 70 Table of Contents Certificate of Interested Persons and Corporate Disclosure Statement …… C-1 of 1 Statement Regarding Oral Argument……………………………………………... i Table of Contents ………………………………………………………………… ii Table of Citations ………………………………………………………………... iv Statement of Jurisdiction ……………………………………………………….. vii Statement of the Issues ………………………………………………………....... 1 Course of Proceedings …………………………………………………………… 2 Statement of Facts ……………………………………………………………….. 3 Standards of Review ……………………………………………………………... 7 Summary of the Argument ………………………………………………………. 8 Argument and Citations of Authority …………………………………………… 10 I. THE DENIAL OF SCRUSHY’S MOTION TO RECUSE BASED ON THE DISTRICT JUDGE’S PARTICIPATION IN TWO EX PARTE MEETINGS WAS ERROR BECAUSE THERE WAS NO FULL DISCLOSURE ON THE RECORD OF THE BASIS FOR DISQUALIFICATION AND THE COURT APPLIED A SUBJECTIVE STANDARD RATHER THAN THE REQUIRED OBJECTIVE STANDARD ……………… 10 A. THIS COURT SHOULD REMAND FOR A COMPLETE DETERMINATION OF THE FACTS RELATING TO THE EX PARTE MEETINGS BECAUSE THERE WAS NO FULL DISCLOSURE ON THE RECORD OF THE FACTUAL BASIS FOR DISQUALIFICATION……………………………………………… 12 ii Case: 12-10694 Date Filed: 04/09/2012 Page: 5 of 70 B. BY CONCLUDING THAT THE TRIAL COURT WAS NOT ACTUALLY AFFECTED BY WHAT WAS SAID IN THE EX PARTE MEETINGS THE COURT BELOW FAILED TO APPLY THE REQUISITE OBJECTIVE STANDARD IN DETERMINING THE RECUSAL MOTION……………………………………………… 19 II. THE COURT ABUSED ITS DISCRETION IN DENYING ALL DISCOVERY REQUESTS BASED ON A FACIALLY INCOMPLETE IN CAMERA INSPECTION, APPLICATION OF AN INCORRECT LEGAL STANDARD, AND FAILURE TO CONSIDER KEY PORTIONS OF SCRUSHY’S EVIDENTIARY SHOWING ……………………………..... 28 A. THE MAGISTRATE’S REPRENTATIONS OF THE MATERIALS EXAMINED IN HIS IN CAMERA REVIEW ARE NOT SUPPORTED BY THE RECORD ………………………….. 29 B. THE MAGISTRATE APPLIED AN INCORRECT LEGAL STANDARD IN DENYING THE MOTIONS FOR DISCOVERY……. 34 C. THE COURT FAILED TO CONSIDER KEY SHOWINGS THAT THERE WAS A FIRM EVIDENTIARY BASIS TO BELIEVE THAT EVIDENCE THAT WOULD ENABLE SCRUSHY TO PROVE HIS CLAIMS LIKELY EXISTS ……………. 41 III. THE DENIAL OF SCRUSHY’S MOTION FOR NEW TRIAL WITHOUT CONDUCTING AN EVIDENTIARY HEARING WAS AN ABUSE OF DISCRETION ………………………………………………. 47 Conclusion …………………………………………………………………….. 58 Certificate of Compliance ……………………………………………………… 60 Certificate of Service …………………………………………………………… 61 iii Case: 12-10694 Date Filed: 04/09/2012 Page: 6 of 70 Table of Citations Cases Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc) ………... 17 Caperton v. A.T. Massey Coal Co., 556 U.S. 868 (2009) ……………………… 19 Easley v. University of Michigan Bd. of Regents, 853 F.2d 1351 (6th Cir. 1988) …………………………………………………………… 17 Harris v. Nelson, 394 U.S. 286 (1969) ……………………………………......... 28 Haller v. Robbins, 409 F.2d 857 (1st Cir. 1969) ……………………………….. 38 Mattox v. United States, 146 U.S. 140 (1892) ………………………………… 56 Neder v. United States, 527 U.S. 1 (1999) …………………………………….. 53 Parker v. Connors Steel Co., 855 F.2d 1510 (11th Cir. 1988)………………... 7, 25 Pekar v. United States, 315 F.2d 319 (5th Cir. 1963) ………………………….. 56 Price Bros. Co. v. Philadelphia Gear Corp., 629 F.2d 444 (6th Cir. 1980) …… 17 Remmer v. United States, 347 U.S. 227 (1954)…………………………………. 56 Scrushy v. United States, 130 S.Ct. 3541 (2010) ………………………………… 2 Skilling v. United States, 130 S.Ct. 2896 (2010) ………………………………... 2 United States v. Adams, 785 F.2d 917 (11th Cir. 1986) ………………………... 16 United States v. Armstrong, 517 U.S. 456 (1996) …………………………... 34, 50 United States v. Betner, 489 F.2d 116 (5th Cir. 1974) ………………………….. 56 United States v. Campa, 459 F.3d 1121 (11th Cir. 2006) (en banc) …………… 50 iv Case: 12-10694 Date Filed: 04/09/2012 Page: 7 of 70 United States v. Espinosa-Hernandez, 918 F.2d 911 (11th Cir. 1990) … ……………………………………………. 7, 29, 36, 46 United States v. Frazier, 387 F.3d 1224 (11th Cir. 2004) (en banc) …………. 7, 47 United States v. Gordon, 817 F.2d 1538 (11th Cir. 1987) ……………… 36, 49, 51 United States v. Kelly, 888 F.2d 732 (11th Cir. 1989) …………………………… 7 United States v. Meinster, 488 F.Supp. 1342 (S.D. Fla. 1980) …………………. 16 United States v. Patti, 337 F.3d 1317 (11th Cir. 20030 ……...... 7, 8, 16, 19, 20, 24 United States v. Phillips, 664 F.2d 971 (5th Cir. Unit B 1981) …………………. 16 United States v. Potashnick, 609 F.2d 1101 (5th Cir. 1980) ………………………………………… 8, 17, 20, 25, 26, 27 United States v. Rhymes, 196 F.3d 207 (4th Cir. 1999) ………………………… 17 United States v. Siegelman, 561 F.3d 1215 (11th Cir. 2009) (“Siegelman I”) …………………………………………………. 2, 5, 24, 56 United States v. Siegelman, 640 F.3d 1159 (11th Cir. 2011) (“Siegelman II”) …………………………………………………… 3, 6, 56 United States v. Simms, 385 F.3d 1347 (11th Cir. 2004) ………………………. 16 United States v. Slocum, 708 F.2d 587 (11th Cir. 1983) …………………….. 8, 47 United States v. State of Alabama, 828 F.2d 1532 (11th Cir. 1987) …………. 7, 17 United States v. Velarde, 485 F.3d 553 (10th Cir. 2007) ….. 7, 9, 28, 29, 34, 37, 39 Young v. U.S. ex rel. Vuitton et Fils, 481 U.S. 787 (1987) ……………………… 52 v Case: 12-10694 Date Filed: 04/09/2012 Page: 8 of 70 Statutes and Rules 28 U.S.C. § 144 …………………………………………………………………. 17 28 U.S.C. § 455(a) ……………………………………………10, 17, 23, 25, 26, 27 28 U.S.C. § 455(b)(1) ………………………………………. 10, 18, 23, 24, 26, 27 28 U.S.C. § 455(b)(5)(iv) ……………………………………………….. 10, 24, 26 28 U.S.C. § 455(e) ………………………………………………………………. 16 28 U.S.C. § 1291………………………………………………………………… vii Fed. R. Evid. 403 ………………………………………………………………... 37 Fed. R. Evid. 608(b) …………………………………………………………….. 37 vi Case: 12-10694 Date Filed: 04/09/2012 Page: 9 of 70 Statement of Jurisdiction This appeal is from the orders of the district court denying Appellant’s motion for recusal (Doc. 1024), the district court’s order (Doc. 1078) affirming the magistrate judge’s denial of discovery on Appellant’s motion for new trial (Doc. 1070), and the district court’s January 30, 2012 denial of Appellant’s motion for new trial based on newly discovered evidence without a hearing. Doc. 1072. Appellant Scrushy timely filed his notice of appeal on February 6, 2012. Doc. 1080. This Court has jurisdiction pursuant to 28 U.S.C. § 1291, which gives the courts of appeals jurisdiction over all final decisions of the district courts of the United States. vii Case: 12-10694 Date Filed: 04/09/2012 Page: 10 of 70 Statement of the Issues I. Should this Court remand Appellant’s recusal motion based on the district judge’s participation in two ex parte meetings because there was no full disclosure on the record of the factual basis for disqualification and the court applied a subjective standard in determining recusal instead of the required objective standard? II. Did the district court abuse its discretion by denying all requests for discovery in support of Appellant’s motion for new trial by relying on a facially incomplete in camera review, application of an incorrect legal standard, and failure to consider key portions of Appellant’s showing that the evidence sought likely exists? III.
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