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U.S. v. FORBES

May 29, 2001

UNITED STATES OF AMERICA,
v.
WALTER A. FORBES AND E. KIRK SHELTON



The opinion of the court was delivered by: William H. Walls, District Judge

  OPINION

Defendant Walter A. Forbes moves to return this matter to the Clerk of the Court for random reassignment and for discovery of the contents of three sealed affidavits filed by the government in the civil In re Cendant litigation, under Master File Civ. No. 98-1664 (WHW) and of the court's assignment procedures for related criminal cases. Oral argument was heard April 6, 2001. The motion is denied.

BACKGROUND

This Court has handled the In re: Cendant Corporation Securities Litigation, consisting of various consolidated civil cases related to accounting irregularities at Cendant and CUC, since early 1998. The litigation has been consolidated in Master File Civ. No. 98-1664. On June 14, 2000, the government filed criminal informations against three former CUC/ Cendant employees, Cosmo Corigliano, Anne Pember and Caspar Sabatino. Those criminal matters were assigned to this Court as related to the pending civil litigation. On the same day, those three individuals plead guilty and entered into cooperation agreements with the government.

On February 28, 2001, Walter A. Forbes ("Forbes") and E. Kirk Shelton ("Shelton") were indicted on one count of conspiracy and one count of wire fraud. The same day, the government forwarded a "related-case" letter to the Clerk of the Court which enclosed the Indictment against the defendants Forbes and Shelton. The one-page letter stated:

The charges contained in the Indictment arose out of the same events charged in an Information, United States v. Cosmo Corigliano, Crim. No. 00-379, which was assigned to the Honorable William H. Walls. Cosmo Corigliano plead guilty to conspiracy and wire fraud, and he is a potential witness against the above-named defendants. He has not yet been sentenced.

Pursuant to Local Criminal Rule 18.1, this letter is submitted to inform you of the relationship of these cases so that you may determine whether this Indictment should be considered a related case to the case against Cosmo Corigliano and assigned to Judge Walls in the interests of judicial economy.

February 28, 2001 letter from Michael Guadagno, Chief, Fraud and Public Protection Division, to Melvin Jackson, Deputy Clerk ("February 28 letter"). This letter is not contained in the Clerk's file for this matter. The Clerk's office assigned this case to this Court, after inquiring whether the Court would agree to handle the matter as a related case.

Defendant Forbes moves to have this criminal matter placed back into a random assignment wheel to be reassigned.*fn1 Forbes argues that the government's related case letter and the assignment of this case to this Court violates Local Civil Rule 18.1. Forbes contends this Rule requires random assignment of cases to judges throughout the District without regard to whether the matter is related to another pending matter. Forbes relies on the distinction between Rule 18.1 and Local Civil Rule 40.1(c): The latter explicitly allows the assignment of civil cases to judges, pursuant to specified procedures, whereas the Criminal Rule has no similar explicit provision. Forbes also argues that the assignment of this matter to this Court is in violation of the Rule because the only reason it was assigned here is because of the Corigliano matter, which was assigned to the Court apparently because of the related pending civil litigation. Forbes argues that the Corigliano matter should never have been assigned to this Court because even under the non-binding commentary to Local Rule 18.1, there is no procedure to assign a criminal matter to one judge on the basis of a "related" pending civil matter. Forbes also protests that the Clerk's files for both the Corigliano matter and this matter contain no records to indicate how the matters came to be assigned to this Court. The February 28 letter from the government is not filed in the Clerk's file; no similar letter appears in the Clerk's file for the Corigliano matter. Apparently, Forbes' counsel made an inquiry of the Clerk's office for information related to the assignment system and was told that such information is not public. Forbes objects to there being no record in the Clerk's file of the February 28 letter. He argues that the Notice of Allocation dated March 1, 2001 states only that the indictment had been allocated to Newark in furtherance of the provisions of the Speedy Trial Act and that the action had been assigned to this Court. The Notice does not disclose the existence of the February 28 letter and does not indicate that the Clerk considered this matter a "related case" to the Corigliano matter. Accordingly, Forbes requests discovery into the assignment procedures used in this case and in criminal matters in this District generally.

Forbes further contends that the government's "causing" the assignment of this matter to this Court creates an appearance of impropriety and violates his Due Process rights. Forbes maintains that certain "ex parte" communications between the government and this Court create an appearance of impropriety. He further argues that the "improper assignment" of this matter prejudices him "by depriving him of his right under the Local Rules to have his case randomly assigned on a state-wide basis, and by permitting the government to select a presiding judge with whom it has repeatedly communicated ex parte regarding this criminal matter." Forbes Br., at 1.

Forbes counsel asserts the following "ex parte communications" between the government and this Court took place:

(1) a personal meeting between the Court and the assistant U.S. Attorney in charge of the criminal investigation which purportedly took place on July 9, 1999;
(2) the government's submission of a sealed affidavit on July 20, 1999 in support of a motion to stay discovery in the civil matter pending the outcome of the then- pending criminal investigation;
(3) another sealed affidavit filed by the government on September 6, 2000 in support of a second motion to stay civil discovery pending the outcome of a related criminal investigation;
(4) the February 28, 2001 "related-case letter" to the Clerk of the Court; and
(5) a March 1, 2001 Sealed Affidavit submitted in support of the government's motion to stay discovery as to forty-four individuals who the government expected will be witnesses in the criminal proceeding against Forbes and Shelton.

DISCUSSION

A. The Alleged "Ex Parte ...


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