United States of America v. Frank Costello

United States Court of Appeals Second Circuit
255 F.2d 876 (1958)

ELI5:

Rule of Law:

A prosecutor's inspection of prospective jurors' tax returns to aid in jury selection is permissible under Treasury regulations and does not violate a defendant's rights. Furthermore, a new trial will not be granted based on newly discovered evidence if the defendant failed to exercise due diligence to discover and raise the issue at trial.

Facts:

Frank Costello was investigated for income tax evasion for the years 1946 through 1949.
During the investigation, the government initiated a 'mail watch,' directing Post Office employees to record the names and return addresses from the outside of envelopes addressed to Costello.
This information was transmitted to the prosecution for use in the investigation, but the mail was never opened or significantly delayed.
Prior to Costello's trial, the chief prosecutor had an Internal Revenue agent inspect the tax returns of approximately 150 individuals on the jury panel.
The agent provided the prosecutor with notes on the veniremen's occupation, income, dependents, and taxes paid or refunded.
The prosecutor used this information to create a numerical rating system to assist in exercising the government's peremptory challenges during jury selection.
The jurors who were ultimately impaneled and served on the case were unaware that their tax returns had been inspected by the prosecution.

Procedural Posture:

Frank Costello was indicted in 1953 for income tax evasion in the U.S. District Court.
Following a jury trial, Costello was convicted on three of four counts.
Costello appealed his conviction to the U.S. Court of Appeals for the Second Circuit.
The Court of Appeals affirmed the convictions on two counts and reversed on one count.
The U.S. Supreme Court later affirmed the remaining convictions on a limited review.
In November 1956, Costello filed a motion for a new trial in the U.S. District Court, alleging newly discovered evidence regarding wiretaps, a mail watch, and inspection of jurors' tax returns.
The District Court denied the motion for a new trial.
Costello, as appellant, appealed the denial of his motion for a new trial to the U.S. Court of Appeals for the Second Circuit.

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Issue:

Does a prosecutor's pre-trial inspection of prospective jurors' income tax returns for the purpose of exercising peremptory challenges violate the defendant's right to a fair and impartial jury, thereby requiring a new trial?

Opinions:

Majority - Hincks, Circuit Judge.

No. A prosecutor's inspection of prospective jurors' tax returns for the purpose of jury selection is a permissible practice and does not render a trial unfair. First, the court found the 'mail watch' was not illegal, as it did not involve opening mail or causing obstruction or delay prohibited by federal statutes. Second, regarding the wiretap evidence, the motion was denied because Costello, knowing of previous state wiretaps on his phone, failed to exercise due diligence to investigate or object to potential wiretap evidence at his trial. Finally, and most significantly, the inspection of jurors' tax returns did not violate any statute and was permissible under Treasury regulations allowing U.S. attorneys access to returns for official use in litigation. The practice did not result in a biased or 'specially conditioned' jury because the jurors were unaware of the inspection. The information simply enabled the prosecution to more intelligently exercise its peremptory challenges, which is a rejective process designed to eliminate potentially biased jurors, not a selective process to empanel a biased one. The court rejected policy arguments about juror intimidation as 'farfetched bogies' and held that it would not proscribe a practice that violated no statute or Supreme Court rule.

Analysis:

This decision solidifies the broad discretion afforded to prosecutors in trial preparation and jury selection, establishing that the use of otherwise confidential government records for juror vetting is permissible. The ruling reinforces the high threshold for granting a new trial, underscoring the defendant's burden to exercise 'due diligence' in raising evidentiary issues at the first opportunity. By sanctioning the informational imbalance where the government can access data unavailable to the defense, the case highlights a judicial tolerance for prosecutorial advantages in the adversarial system. The decision signals that courts are reluctant to create new rules of criminal procedure or proscribe prosecutorial practices in the absence of a clear statutory violation or a supervisory rule from the Supreme Court.

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