Neder v. United States

PETITIONER: Neder
RESPONDENT: United States
LOCATION: Knowles' Car

DOCKET NO.: 97-1985
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eleventh Circuit

CITATION: 527 US 1 (1999)
ARGUED: Feb 23, 1999
DECIDED: Jun 10, 1999

ADVOCATES:
Javier H. Rubenstein - Argued the cause for the petitioner
Javier H. Rubinstein - on behalf of the Petitioner
Roy W. McLeese, III - Department of Justice, argued the cause for respondent

Facts of the case

In the mid-1980's, Ellis E. Neder, Jr., engaged in a number of real estate transactions financed by fraudulently obtained bank loans and schemes involving land development fraud. He was indicted on numerous counts of federal mail fraud, wire fraud, bank fraud and of filing false federal income tax returns. At trial, the District Court instructed the jury that, to convict on the bank and tax offenses, it did not need to consider the materiality of any false statements, or whether Neder's actions, in fact, caused others to be defrauded. In instructing the jury on mail and wire fraud, the court did not include materiality as an element of either offense. Neder objected. Thereafter, Neder was convicted of filing false federal income tax returns and of federal mail fraud, wire fraud, and bank fraud. In affirming, the Court of Appeals held that the court erred in failing to submit the materiality element of the tax offense to the jury. However, under harmless-error analysis, the appeals court concluded the error was harmless because the error "'did not contribute to the verdict obtained." The appeals court also determined that materiality is not an element of mail fraud, wire fraud, and bank fraud. Thus, the District Court did not err in failing to submit materiality to the jury.

Question

Does the District Court's omission of the element of materiality from a jury instruction on tax fraud constitute harmless error? Is materiality an element of federal mail, wire, and bank fraud?

Media for Neder v. United States

Audio Transcription for Oral Argument - February 23, 1999 in Neder v. United States

William H. Rehnquist:

We'll hear argument next in No. 97-1985, Neder v. United States.

Mr. Rubinstein.

Javier H. Rubinstein:

Thank you, Mr. Chief Justice, and may it please the Court:

This case presents two entirely distinct questions: whether the failure of the trial court to instruct the jury on an element of the crime is subject harmless error review even if the element was not in dispute at trial; and, second, whether materiality is an element of the Federal mail, wire and bank fraud statutes.

William H. Rehnquist:

The first question is the one that we reserved in our Johnson opinion, is it not?

Javier H. Rubinstein:

It is, Your Honor.

Although Johnson did not squarely present the question, in any event, since there had been no contemporaneous objection to the error.

And, as a result--

William H. Rehnquist:

And it was a plain error?

Javier H. Rubinstein:

--it was a plain error case; that's correct.

Antonin Scalia:

May I ask you, before you go on with number one.

I assume you're going to take number one before you take number two?

Javier H. Rubinstein:

That was the plan.

Antonin Scalia:

Okay.

Why do you say that it was not in dispute in the trial?

Wasn't there a general denial of the indictment?

Javier H. Rubinstein:

Justice Scalia, I assume you're referring to the phrasing of the question presented.

The phrasing of the question presented was taken from the government's phraseology of the question.

We agree that having pled not guilty to the crime and having specifically requested an instruction on materiality, that no court could constitutionally declare that the element was truly uncontested.

However, we are--

Antonin Scalia:

Not in dispute.

But you acknowledge that you didn't bring in any... any evidence or argumentation specifically directed to that point?

Javier H. Rubinstein:

--Yes.

We agree that materiality was not the central focus of the trial.

Antonin Scalia:

Not the cent... it wasn't the focus at all?

Javier H. Rubinstein:

I would... I would agree with that.

In this case, it is undisputed that the trial court completely removed--

Sandra Day O'Connor:

Indeed, if it goes back for some reason, if we agree with you and it's retried, you don't really think the government's going to have any trouble proving materiality, I assume?

Javier H. Rubinstein:

--I don't... I don't believe that, on a retrial, that materiality would be a central focus of any defense to the tax fraud charge.

I would agree with that, Justice O'Connor.