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United States of America v. Thomas C. Reed

United States Court of Appeals, Second Circuit
773 F.2d 477 (1985)
ELI5:

Rule of Law:

Venue for federal perjury and obstruction of justice charges is proper both in the district where the criminal acts were committed and in the district where the judicial proceeding intended to be influenced is pending.


Facts:

  • Sellers of Amax Inc. options filed a civil lawsuit in the Southern District of New York against Thomas Reed, alleging he engaged in illegal insider trading.
  • The lawsuit claimed Reed used confidential information about a merger proposal, which he allegedly learned from his father on the Amax board, to profit from trading options.
  • Reed's deposition for the New York civil action was taken in San Francisco, California, for his convenience.
  • During the deposition, Reed testified that he did not speak with his father on a key date and was unaware of a special board meeting regarding the merger before his trades.
  • Reed also presented and relied upon handwritten notes during his deposition, which were written in Virginia and California.
  • The government later alleged that Reed's testimony was false and that the notes were fraudulent creations made after the fact to disguise his illegal trading.
  • The transcript of Reed's deposition was subsequently filed with the U.S. District Court for the Southern District of New York as part of the pending civil action.

Procedural Posture:

  • A grand jury in the U.S. District Court for the Southern District of New York returned a four-count indictment against Thomas Reed.
  • Reed filed a motion in the district court to dismiss the perjury (count three) and obstruction of justice (count four) charges for improper venue.
  • The district court judge granted Reed's motion and dismissed counts three and four for improper venue.
  • The United States, as the appellant, appealed the district court's dismissal to the U.S. Court of Appeals for the Second Circuit.

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Issue:

Does venue for federal charges of perjury and obstruction of justice properly lie in the judicial district where the affected proceeding is pending, even if the underlying criminal acts occurred in a different district?


Opinions:

Majority - Winter, Circuit Judge

Yes. Venue for federal charges of perjury and obstruction of justice is proper in the district where the affected judicial proceeding is pending, even when the acts constituting the offenses occurred elsewhere. The court adopted a 'substantial contacts rule' for determining venue, which considers multiple factors: the site of the defendant's acts, the elements and nature of the crime, the locus of the effect of the criminal conduct, and the suitability of the district for factfinding. For the perjury count (§ 1623), the court found that testimony ancillary to a judicial proceeding is 'inextricably bound' to the district where that proceeding is pending, as that district is the source of jurisdiction and the location of the intended effect. For the obstruction of justice count (§ 1503), the court held that the existence of an ongoing judicial proceeding is an element of the crime, giving that district a compelling interest in protecting the integrity of its own proceedings. This reasoning is analogous to criminal contempt cases where venue lies in the district whose order was violated, regardless of where the violation occurred. In reaching this conclusion, the court explicitly overruled its prior decision in United States v. Brothman.



Analysis:

This decision significantly clarifies and expands venue options for prosecutors in cases involving interference with the judicial process. By rejecting a rigid, single-situs rule and adopting a flexible 'substantial contacts' test, the court empowers the judicial district where a proceeding is pending to prosecute crimes aimed at corrupting it. This holding ensures courts can defend the integrity of their own proceedings without relying on the prosecutorial discretion of other districts where the physical acts occurred. By overruling prior precedent, this case aligned the Second Circuit with the majority of other circuits and established a new, clear standard for venue in perjury and obstruction cases.

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