Split Second Circuit Panel Debates Judicial Deference to Prosecutorial Discretion to Dismiss a Prosecution That Has Already Been Tried to Verdict

In United States v. v. Blaszczak, No. 18-2811 (2d Cir. Dec. 28, 2022), the panelists disagree about whether a federal court owes deference to the Justice Department’s decision to abandon prosecution on a claim at the appeal stage.

“This appeal returns to us on remand from the United States Supreme Court for further consideration, in light of Kelly v. United States, 140 S. Ct. 1565 (2020), of this Court’s prior affirmance of judgments of the United States District Court for the Southern District of New York convicting defendants David Blaszczak, Theodore Huber, Robert Olan, and Christopher Worrall of conversion of government property in violation of 18 U.S.C. § 641 and wire fraud in violation of 18 U.S.C. § 1343; and convicting Blaszczak, Huber, and Olan of securities fraud in violation of 18 U.S.C. § 1348 (‘Title 18 securities fraud’), conspiracy to commit wire fraud and Title 18 securities fraud in violation of 18 U.S.C. § 1349, and conspiracies in violation of 18 U.S.C. § 371 to, inter alia, convert government property and defraud the United States, all originating from misappropriation of confidential information from the Centers for Medicare & Medicaid Services (‘CMS’), see United States v. Blaszczak, 947 14 F.3d 19 (2d Cir. 2019) (‘Blaszczak I’), vacated and remanded, 141 S. Ct. 1040, 2021 WL 78043 (Jan. 11, 2021).”

While defending various of the conspiracy convictions, the Justice Department – pursuant to Fed. R. Crim. P. 48(a) – sought a remand to dismiss various counts in light of the Supreme Court’s intervening decision in Kelly. The Supreme Court there unanimously held that to make out a violation of the wire fraud statute, 18 U.S.C. § 1343, the defendant must aim to obtain money or property, and not an intangible benefit. The U.S. Attorney evidently determined that it could not reconvict under the new standard.

The panel majority holds that “given the Supreme Court’s decision in Kelly and the prosecutorial discretion to which the Executive Branch of the government is entitled, we grant the government’s request to remand these cases to the district court for dismissal of the seven substantive counts of conviction and the conspiracy conviction in Count Two.”

“The government may elect to eschew or discontinue prosecutions for any of a number of reasons. Rarely will the judiciary overrule the Executive Branch’s exercise of these prosecutorial decisions.” Citing Petite v. United States, 361 U.S. 529 (1960), the panel observes that “[e]ven when a defendant has been tried, convicted, and sentenced in a prosecution that, under the Petite policy, would not have been brought if the Justice Department’s internal procedures had been properly or timely followed, the courts have granted the government’s eventual motion to vacate the conviction and have the indictment dismissed.”

“With these considerations in mind, we conclude that the government’s decision to seek the dismissal of the seven substantive counts convicting defendants under §§ 1343, 1348, and 641, along with the conspiracy charges in Count 2, is appropriate and owed deference.” The panel majority, out of caution, also reviews the merits of the convictions to determine – as the government had – that they were inconsistent with the law as declared by Kelly.

Dissenting, Judge Sullivan writes that the Justice Department’s discretion to dismiss a prosecution is subject to stricter judicial review after a conviction. “While there can be no doubt that the government has broad discretion in deciding which cases to prosecute and how to prosecute those cases, once the government has involved the judiciary by obtaining an indictment or a conviction, its discretion is tempered by the courts’ independent obligations. In other words, we cannot tell the government whom to prosecute . . . . The government likewise cannot tell us whether to vacate a duly obtained conviction.”

“Here, we are asked to decide whether final judgments of conviction entered after a jury trial and sentencing should be vacated because the government now contends that they were based on an alleged legal error. Most of the cases cited in the majority opinion, however, were in materially different procedural postures. And in the few cases in which courts agreed with the government’s request to dismiss an indictment or vacate a judgment of conviction, those courts did so only after fulfilling their obligation to independently assess the underlying validity of the indictments or convictions at issue.”

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