Appeal from The United States District Court for the Eastern District of Pennsylvania, D.C. Criminal No. 72-384
Gibbons, Chief Judge, Becker and Weis, Circuit Judges.
Fifteen years after this petitioner was convicted of mail fraud, the Supreme Court held that the governing statute does not permit prosecution solely on the theory that a governmental official's wrongful conduct deprived the citizenry of his honest services. Petitioner then asked the district court to vacate his conviction in light of the Court's holding but was denied relief because he had failed to raise the issue on direct appeal. In addition, the district judge noted that the jury had been charged that it also could convict if it found that the kickbacks petitioner received had caused economic loss to the municipality that had employed him. We will affirm.
In 1972, petitioner Maurice Osser, a City Commissioner of Philadelphia, was convicted on seven counts of mail fraud, 18 U.S.C. § § 1341, 2, one count of conspiracy to commit mail fraud, 18 U.S.C. § 371, and one count of obstruction of justice, 18 U.S.C. § 1510. The court imposed sentences of imprisonment and fines on the mail fraud counts, a concurrent sentence of imprisonment on the conspiracy count, along with a fine, and a consecutive prison sentence and fine on the obstruction of justice charge. The judgments were affirmed by this Court on direct appeal. United States v. Osser, 483 F.2d 727 (3d Cir.), cert. denied, 414 U.S. 1028, 38 L. Ed. 2d 321, 94 S. Ct. 457 (1973). Osser served his periods of incarceration and probation and has paid the fines.
In 1987, the Supreme Court decided in McNally v. United States, 483 U.S. 350, 107 S. Ct. 2875, 97 L. Ed. 2d 292 (1987), that the federal mail fraud statute did not reach schemes to deny the public its right to have governmental officials perform their duties honestly and impartially. "The mail fraud statute clearly protects property rights, but does not refer to the intangible right of the citizenry to good government." Id. at 356, 107 S. Ct. at 2879. In so deciding, the Court itself acknowledged that the Courts of Appeals had consistently interpreted the statute as proscribing schemes to defraud persons of their intangible rights. Id. at , 107 S. Ct. at 2880.
Armed with the McNally decision, Osser sought to vacate his conviction by petitioning for a writ of coram nobis from the same district judge who presided at his 1972 trial. Osser asserted that the jury had been erroneously charged that it could convict if the government proved that "the citizens of Philadelphia were defrauded out of the loyal and faithful services of an employee" and that it need not "show an actual monetary loss to the City." Arguing that the jury instructions invalidated his conviction, Osser contended that relief was due because he suffers collateral adverse consequences flowing from his conviction -- possible impeachment as a witness, enhanced penalties for future convictions, and the denial of his city pension.
In reviewing the underlying conviction, the district court characterized the scheme as "a classic 'bid rigging' and 'kick-back'" arrangement in which two printing companies submitted collusive bids on the city's requests, ensuring that each firm would get certain contracts. In operation for fifteen years, the printers' secret agreement prevented actual competitive bidding. Osser, by virtue of his position as City Commissioner, was able to influence the selection of printing firms and, for his part in the annual scheme, received "commissions."
The trial record revealed that the jurors had been instructed on four separate postulates that could lead to a conviction for mail fraud. One possibility was that the city had been defrauded of money in the form of "commissions" or kickbacks that Osser received; another was that the citizens of Philadelphia had been deprived of Osser's honest and impartial services.*fn1
In denying Osser's petition, the district court observed that McNally proscribed only one of the two separate theories on which the mail fraud counts had been submitted to the jury; a conviction based on a monetary loss approach would still be valid. The court also noted that portions of the record were no longer available, that Osser had not raised the intangible rights issue either at trial or on direct appeal, and that he was not seeking to vacate the obstruction of justice conviction. Although the prosecution had presented "overwhelming evidence" to establish Osser's guilt in the 1972 trial, it was doubtful that, fifteen years later, the government would be able to present sufficient proof to allow the case to go to a jury. The district court observed that, in these circumstances, granting a new trial would create a "manifest injustice to the City of Philadelphia and its citizens."
On appeal, Osser argues that McNally is to be given retroactive effect and that because the issue of guilt was submitted to the jury on two theories, one of which was invalid, the conviction must be vacated. The government contends that the scheme established at trial had the inevitable result of causing property loss to the city and hence, McNally does not affect the validity of the conviction. In addition, the government asserts that, because Osser had not previously contested the intangible rights theory, he is not now entitled to coram nobis relief.
The retroactivity of Supreme Court holdings in criminal cases has proved to be a troubling concept, particularly as applied to procedural rulings and prophylactic measures. See, e.g., Griffith v. Kentucky, 479 U.S. 314, 93 L. Ed. 2d 649, 107 S. Ct. 708 (1987); Linkletter v. Walker, 381 U.S. 618, 14 L. Ed. 2d 601, 85 S. Ct. 1731 (1965). McNally is of a different nature because it holds that certain misconduct does not fall within the proscription of the mail fraud statute and thus the decision goes to substance rather than procedure.*fn2
A ruling that a trial court lacked power to convict a defendant for proven activity must necessarily be retroactive. The Supreme Court stated in United States v. United States Coin & Currency, 401 U.S. 715, 724, 28 L. Ed. 2d 434, 91 S. Ct. 1041 (1971), that "even the use of impeccable factfinding procedures could not legitimate a verdict" where "we have held that the conduct being penalized is constitutionally immune from punishment. No circumstances call more for the invocation of a rule of complete retroactivity." It follows that retroactivity must be given to McNally's holding that a scheme depriving the citizenry of honest services of its local officials was, without more, not prohibited by the mail fraud act. United States v. Shelton, 848 F.2d 1485, 1490 (10th Cir. 1988) (en banc) (habeas corpus proceeding). See United States v. Davis, 417 U.S. 333, 342, 41 L. Ed. 2d 109, 94 S. Ct. 2298 (1974) (collateral attack allowed on basis of intervening change in substantive law).
The Court has also determined that a verdict of guilty based arguably on alternative premises, one of which is erroneous, cannot stand on direct appeal where it is impossible to ascertain on which ground the defendant was convicted. Chiarella v. United States, 445 U.S. 222, 237 n.21, 63 L. Ed. 2d 348, 100 S. Ct. 1108 (1980); Stromberg v. California, 283 U.S. 359, 368, 75 L. Ed. 1117, 51 S. Ct. 532 (1931). See United States v. Dansker, 537 F.2d 40, 51 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S. Ct. 732, 50 L. Ed. 2d 748 (1977).
These general principles, however, are not dispositive of the issues present in the case at hand. Even though McNally is retroactive, it does not always require the vacation of a mail fraud ...