Filed: Nov. 20, 2009
Latest Update: Mar. 02, 2020
Summary: RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 09a0400p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _ X Plaintiff-Appellee, - UNITED STATES OF AMERICA, - - - No. 08-5421 v. , > - Defendant-Appellant. - DONNA HARDY, - N Appeal from the United States District Court for the Western District of Tennessee at Jackson. No. 07-10037-001—James D. Todd, District Judge. Argued: October 13, 2009 Decided and Filed: November 20, 2009 * Before: KENNEDY and ROGER
Summary: RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 09a0400p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _ X Plaintiff-Appellee, - UNITED STATES OF AMERICA, - - - No. 08-5421 v. , > - Defendant-Appellant. - DONNA HARDY, - N Appeal from the United States District Court for the Western District of Tennessee at Jackson. No. 07-10037-001—James D. Todd, District Judge. Argued: October 13, 2009 Decided and Filed: November 20, 2009 * Before: KENNEDY and ROGERS..
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 09a0400p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
Plaintiff-Appellee, -
UNITED STATES OF AMERICA,
-
-
-
No. 08-5421
v.
,
>
-
Defendant-Appellant. -
DONNA HARDY,
-
N
Appeal from the United States District Court
for the Western District of Tennessee at Jackson.
No. 07-10037-001—James D. Todd, District Judge.
Argued: October 13, 2009
Decided and Filed: November 20, 2009
*
Before: KENNEDY and ROGERS, Circuit Judges; HOOD, District Judge.
_________________
COUNSEL
ARGUED: David W. Camp, LAW OFFICES OF DAVID W. CAMP, Jackson,
Tennessee, for Appellant. R. Leigh Grinalds, ASSISTANT UNITED STATES
ATTORNEY, Jackson, Tennessee, for Appellee. ON BRIEF: David W. Camp, LAW
OFFICES OF DAVID W. CAMP, Jackson, Tennessee, for Appellant. R. Leigh
Grinalds, ASSISTANT UNITED STATES ATTORNEY, Jackson, Tennessee, for
Appellee.
_________________
OPINION
_________________
HOOD, Senior District Judge. A jury convicted Defendant-Appellant Donna
Hardy (“Defendant”) of twelve counts of bank fraud and five counts of tax evasion. This
*
The Honorable Joseph M. Hood, Senior United States District Judge for the Eastern District of
Kentucky, sitting by designation.
1
No. 08-5421 United States v. Hardy Page 2
appeal arises from the district court’s exclusion of defense evidence. The district court
found that Defendant had failed to comply with the reciprocal discovery requirement of
Fed. R. Crim. P. 16(c) and excluded certain evidence. Defendant filed a Motion for a
New Trial, which was denied, and this appeal followed. Defendant appeals on the
grounds that the district court erred in excluding evidence and violated her rights under
the United States Constitution’s Sixth Amendment compulsory process clause. For the
reasons which follow, Defendant’s conviction is AFFIRMED.
I. Factual and Procedural Background
This case involves the embezzlement of over $250,000 from Defendant’s long-
time employer, Milan Box Corporation. In 2002, Milan Box Corporation merged with
Dedmon Company. Defendant worked for Milan Box Corporation for a short period in
1978 and then again from 1981 until 2004. Defendant had control over the accounting
and treasury functions of Milan Box Corporation, although she did not have the authority
to sign checks for the corporation.
In June 2003, Tony Hamaguchi, treasurer of Milan Box Corporation, began to
review the account activity at Milan Box Corporation’s banks and subsequently became
aware of unusual activity in the accounts. Mr. Hamaguchi uncovered an unanticipated
$81,000 transaction, which he immediately brought to the attention of Milan Box
Corporation President Franklin Dedmon.
The $81,000 transaction and suspicious paperwork uncovered during a search of
Defendant’s office prompted Dedmon to hire Cleston Daniels, a certified public
accountant, to conduct an audit. Daniels’ audit uncovered additional suspicious activity,
including the fact that the Dedmon Company bank account was still open and active,
although the Dedmon Company ceased to exist in 2002. When asked about the
unaccounted-for checks that Daniels uncovered during his audit, Defendant replied that
she had loaned the company money and was paying herself back. Defendant eventually
produced some documents that she claimed proved the existence of the loan, but stated
No. 08-5421 United States v. Hardy Page 3
that the rest of the documents were in the possession of payroll clerk Barbara Williams,
who was deceased at the time of the investigation.
Defendant claimed that due to Milan Box Corporation’s financial difficulties, she
began lending the corporation money in $5,000 to $7,000 increments so that Milan Box
Corporation could cover its payroll taxes and the plant would not shut down. Defendant
stated that she borrowed approximately $86,000 from credit card cash advances at 18%
interest in order to lend this money to Milan Box Corporation. She waited several years
and began making “repayments” to herself of the claimed $86,000 in principal and
additional 18% in interest. Defendant made these payments by transferring money from
the Milan Box Corporation bank account to the Dedmon Company bank account and,
finally, to her personal bank account.
Auditor Mark Layne testified at trial that there was no record of any loans from
Defendant to Milan Box Corporation or the Dedmon Company in either company’s
financial records. When Layne asked Defendant why the loans were not on the books,
she had been unable to provide a satisfactory answer. Several government witnesses
testified that they were current or former employees at the banks at which Milan Box
Corporation and the Dedmon Company held accounts and knew that Defendant had
transferred money from the Milan Box Corporation account to the Dedmon Company
account. Defendant testified in her own defense and admitted that she was not
authorized to send money out of the Milan Box Corporation accounts, that no one knew
she was transferring money, that no one except Barbara Williams (now deceased) knew
about the loans to Milan Box Corporation, and that all of the money transferred out of
the Dedmon Company account went into her personal checking account.
This appeal stems from a disagreement at trial over a subpoena duces tecum
served on Milan Box Corporation. The subpoena was served on Milan Box Corporation
the weekend prior to trial. Milan Box Corporation appeared at trial without some of the
documents requested in the subpoena. The district court granted a Motion to Compel
Compliance with the Subpoena, instructing Milan Box Corporation’s counsel that it must
make a good faith effort to produce everything requested in the subpoena. The following
No. 08-5421 United States v. Hardy Page 4
day, counsel for Milan Box Corporation returned to the trial with a few additional
documents, but stated that all of the other documents requested in the subpoena had been
lost or destroyed. At this point, Defendant attempted to introduce into evidence copies
of check stubs that she claimed proved the existence of the loan. The original check
stubs were included in the documents that Milan Box Corporation represented as lost or
destroyed. The government objected, stating that it had never seen the copies of the
check stubs and, therefore, Defendant had failed to comply with the reciprocal discovery
requirement. Defense counsel stated that Defendant had produced the copies to him only
one week prior to trial and that he did not anticipate using the copies at trial. Counsel
for Defendant stated that he had planned on using the original documents obtained from
the subpoena duces tecum served on Milan Box Corporation, but upon being told at trial
that the originals could not be located, decided that he must introduce the copies into
evidence because he did not have any other proof of the check stubs.
The district court sustained the government’s objection to the introduction of the
copies due to Defendant’s failure to comply with the reciprocal discovery requirement.
The jury returned a verdict of guilty on seventeen counts. The district court denied
Defendant’s Motion for a New Trial. Defendant was sentenced to forty-four months’
incarceration.
II. Jurisdiction
The district court had original jurisdiction to hear this case pursuant to 18 U.S.C.
§ 3231 because Hardy was charged with and convicted of an offense against the laws of
the United States, specifically, violations of 18 U.S.C. § 1344 and 26 U.S.C. § 7201.
This Court has jurisdiction over the instant appeal pursuant to 28 U.S.C. § 1291, which
confers appellate jurisdiction over final orders of the district court.
III. Standard of Review
“The applicable standard of review for an evidentiary ruling of the district court
where the evidentiary issues relate to a claimed violation of the Sixth Amendment is the
No. 08-5421 United States v. Hardy Page 5
de novo standard.” United States v. Robinson, 389 F.3d 582, 592 (6th Cir. 2004), (citing
United States v. Lloyd,
10 F.3d 1197, 1216 (6th Cir. 1993)).
IV. Analysis
Defendant argues that her Sixth Amendment compulsory process clause rights
were violated by the district court’s exclusion of the photocopies of the check stubs. The
Sixth Amendment compulsory process clause provides that “[i]n all criminal
prosecutions, the accused shall enjoy the right ... to have compulsory process for
obtaining witnesses in his favor.” U.S. CONST. amend. VI. Defendant’s Sixth
Amendment right to compulsory process was not violated by the exclusion of evidence
because the district court has discretion to exclude evidence when one party fails to
comply with the Federal Rules of Criminal Procedure. Fed. R. Crim. P. 16(d). Fed. R.
Crim. P. 16(b) states that
[i]f a defendant requests disclosure under Rule 16(a)(1)(E) [disclosure of
the government’s documents] and the government complies, then the
defendant must permit the government, upon request, to inspect and to
copy or photograph books, papers, documents ... if:
(i) the item is within the defendant’s possession, custody, or control; and
(ii) the defendant intends to use the item in the defendant’s case-in-chief
at trial.
Fed. R. Crim. P. 16(b). Rule 16 makes it clear that the duty to disclose does not end
during the discovery process, but that
[a] party who discovers additional evidence or material before or during
trial must promptly disclose its existence to the other party or the court
if:
(1) the evidence or material is subject to discovery or inspection under
this rule; and
(2) the other party previously requested, or the court ordered, its
production.
Fed. R. Crim. P. 16(c). Failure to comply with the reciprocal discovery requirement
under Rule 16 may result in a court order forcing the party to disclose the evidence, a
continuance, a prohibition on introducing the undisclosed evidence, or “any other order
that is just under the circumstances.” Fed. R. Crim. P. 16(d)(2).
No. 08-5421 United States v. Hardy Page 6
The district court followed the clear guidelines for reciprocal discovery in
Rule 16. Defense counsel admitted in a bench conference on the record that he had
obtained the check stub copies about a week prior to attempting to introduce the copies
as evidence. When the district court pressed Defendant’s counsel as to why he had not
disclosed the copies at an earlier time, he answered with the perplexing logic that he had
needed to see the original check stubs (which were requested in the subpoena duces
tecum but not produced because they had been lost or destroyed) before he could decide
whether he would need to introduce the copies as evidence, and because he could not
obtain the original check stubs he would certainly have to introduce the undisclosed
copies. This explanation does not adequately elucidate why counsel did not disclose the
check stub copies a week prior to trial, when he first received them from his client.
Defense counsel later admitted that the copies of the check stubs also included
information that reflected negatively on his client and that he was therefore reluctant to
turn over the evidence to the government. The district court stated to Defendant’s
counsel that
the fact that you had these at least a week ago and didn’t send them to
Mr. Grinalds [Assistant United States Attorney] seems to me to be a
violation of the reciprocal discovery rule . . . You had to have provided
these to Mr. Grinalds a week ago if they were documents that you
planned on using at the trial. You didn’t know for sure that you were
going to use them, but you had an indication that they might become
necessary, and they’re no better today than they were a week ago because
the checks weren’t there today and they weren’t there last week. I’m
going to sustain the objection for failure to provide reciprocal discovery.
Joint Appendix, pp. 393-94.
Defendant’s argument that her Sixth Amendment right to compulsory process
was violated is without merit. Additionally, the district court did not err in excluding the
copies of the check stubs. Defendant and her counsel had access to the copies of the
check stubs at least one week prior to trial, but wilfully and purposefully chose not to
disclose those documents to the government, in clear violation of Fed. R. Crim. P. 16(c).
The district court made it clear that had the disputed documents been disclosed to the
government when they were obtained, the documents would have been admissible
No. 08-5421 United States v. Hardy Page 7
(assuming there were no other grounds for their inadmissibility). The check stub copies
were not disclosed, however, until the day of trial when defense counsel sought to
introduce the copies into evidences. A proper sanction for failure to disclose, under Rule
16, is exclusion of the evidence. Fed. R. Crim. P. 16. (d)(2)C). The district court did not
err when it imposed this sanction under the Rule, and even if it did, erroneous
evidentiary rulings rarely constitute a violation of a defendant’s right to present a
defense. Washington v. Schriver, 255 F.3d 45, 56 (2d Cir. 2001).
Defendant claims that she did not disclose the copies to the government until
after she was made aware that the originals were unavailable because the copies would
have been inadmissible under Fed. R. Evid. 1001 prior to that time. This argument is
also unavailing. Disclosure under Rule 16 depends only on whether “the item is within
the defendant’s possession, custody, or control” and whether it is one that “the defendant
intends to use in the defendant’s case-in-chief at trial.” Fed. R. Crim. P. 16(b)(1)(A).
Disclosure under Rule 16 does not depend on the admissibility of the evidence at trial,
particularly because decisions on admissibility of evidence are entirely within the
province of the court, not the parties, so the parties would not be able to accurately
determine prior to trial whether certain evidence would be admissible without a ruling
from the court. If the defendant has control over a document, as Defendant did in this
case, and plans to use that document in the defendant’s case-in-chief, as Defendant
attempted to do in this case, and the defendant has already received discovery from the
government, then the defendant is required to disclose the document to the government
as soon as the defendant learns of it, subject only to the narrow exceptions in Rule 16,
none of which is applicable here. Fed. R. Crim. P. 16. Defendant clearly chose not to
comply with Rule 16, and thus suffered the consequences provided for in the Rule.
Defendant correctly notes that in United States v. Hamilton, this Court stated that
“[w]hen Sixth Amendment rights are implicated in a criminal trial, the district court’s
decision to exclude the evidence and impose the harshest sanction for violation of Rule
16(b) is appropriate only if these rights are outweighed by countervailing public
interests.” United States v. Hamilton, 128 F.3d 996, 1003 (6th Cir. 1997). However, the
No. 08-5421 United States v. Hardy Page 8
Court in Hamilton also stated that “[a]lthough the right of a defendant to present
exculpatory evidence is fundamental, it is not absolute.”
Id. at 1000 (citing Taylor v.
Illinois,
484 U.S. 400, 410 (1988)). This Court noted in Hamilton that the Supreme
Court in Taylor directed trial courts to weigh a defendant’s Compulsory Process Clause
rights against such “countervailing public interests” as “(1) the integrity of the adversary
process; (2) the interest in the fair and efficient administration of justice; and (3) the
potential prejudice to the truth-determining function of the trial process.”
Id. at 1001
(citing
Taylor, 484 U.S. at 414-15).
In the instant case, all three factors weigh in favor of affirming the district court’s
decision to exclude the evidence. Concerns about the “prejudice to the truth-determining
function of the trial process” as well as the “interest in the fair and efficient
administration of justice” were evident. Defense counsel admitted at trial that he was
unsure of the origin of the check stub copies or whether they were even what they
purported to be, yet he still proposed to introduce them into evidence to prove that there
was a loan from the Defendant to the company. Furthermore, the “integrity of the
adversarial process” was at risk here because Defendant and her counsel purposefully
withheld this evidence from the government. “[I]f there is evidence that counsel’s
failure to provide notice of exculpatory evidence in a timely fashion is a willful attempt
to gain a tactical advantage at trial, exclusion is ‘entirely consistent with the purposes
of the Compulsory Process Clause.’” Id. (citing Taylor, 484 U.S. at 415). Defense
counsel was unable to provide the court with adequate reasoning for why he had
received the documents from his client only one week prior to trial or why he then
waited until the middle of trial to disclose this evidence. It appears from defense
counsel’s lack of adequate explanation as to the failure to disclose the documents, and
his later admission that the check stubs might incriminate his client as well as assist her,
that the motivation may have been to gain an advantage at trial by not allowing the
government access to evidence tending to prove its case and then later springing that
same evidence on the government when it was advantageous for Defendant. This further
supports the exclusion of the evidence based on a violation of Rule 16 and our decision
in Hamilton.
No. 08-5421 United States v. Hardy Page 9
Finally, this Court’s decision on whether the exclusion of defense evidence
violated the defendant’s right to present a defense “depends upon whether the omitted
evidence [evaluated in the context of the entire record] creates a reasonable doubt that
did not otherwise exist.” United States v. Blackwell, 459 F.3d 739, 753 (6th Cir. 2006)
(citing Washington v. Schriver,
255 F.3d 45, 57 (2d Cir. 2001)). Defendant admitted at
trial that she had transferred money from the Milan Box Corporation’s account to the
Dedmon Company’s account and then to her personal account without authorization.
The government’s case against Defendant was overwhelming and at trial Defendant
admitted all of the elements of each offense. Copies of check stubs, which defense
counsel admitted were unverified and haphazardly copied and stored, including one
which clearly showed that it was recorded in the ledger as being made out to the Internal
Revenue Service but in actuality was made out to Defendant, would not have created a
reasonable doubt that Defendant had committed the offenses. The district court made no
error in excluding the copies of th check stubs from the evidence, but even if the district
court did err in excluding the evidence, it was harmless error because the excluded
evidence would not have created reasonable doubt.
V. Conclusion
For the foregoing reasons, the judgment of the district court is AFFIRMED.
