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United States v. Kealoha

United States District Court, D. Hawaii

February 21, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
KATHERINE P. KEALOHA 1; LOUIS M. KEALOHA 2; DEREK WAYNE HAHN 3; MINH-HUNG NGUYEN 4; GORDON SHIRAISHI 5; and DANIEL SELLERS 6, Defendants.

          ORDER DENYING KATHERINE AND LOUIS KEALOHAS' MOTION TO DISMISS THE INDICTMENT, ECF NO. 312, AND DENYING RELATED JOINDERS, ECF NOS. 364, 365

          J. Michael Seabright Chief United States District Judge

         I. INTRODUCTION

         Defendants Katherine Kealoha and Louis Kealoha (collectively, “Kealohas”) filed a Motion to Dismiss the Indictment[1] on January 11, 2019, based on allegations of prosecutorial misconduct in grand jury proceedings. ECF Nos. 312, 312-1. The government filed its Response in Opposition to the Motion to Dismiss the Indictment on January 25, 2019. ECF No. 344. On January 31, 2019, both Defendant Derek Wayne Hahn (“Hahn”) and Defendant Minh-Hung Nguyen (“Nguyen”) filed Joinders in the Motion to Dismiss the Indictment. ECF Nos. 364, 365. A hearing was held on February 11, 2019.

         Because the court finds no prosecutorial misconduct that would warrant dismissal of the Indictment, the court DENIES: (1) Kealohas' Motion to Dismiss the Indictment; (2) Hahn's Joinder; and (3) Nguyen's Joinder.

         II. DISCUSSION

         A. Legal Framework

         A federal court may dismiss an indictment for either: (1) constitutional error; or (2) under the exercise of its inherent supervisory authority, based on (with some limitations) its own “procedural rules not specifically required by the Constitution or the Congress.” Bank of Nova Scotia v. United States, 487 U.S. 250, 254 (1988) (internal citation and quotation marks omitted); see also United States v. Caruto, 663 F.3d 394, 397 (9th Cir. 2011). Generally, however, an indictment valid on its face cannot be challenged on the ground that the grand jury acted on inadequate or incompetent evidence.[2] United States v. Calandra, 414 U.S. 338, 343-45 (1974); United States v. Renzi, 651 F.3d 1012, 1027 (9th Cir. 2011).

         One ground for dismissal of an indictment for constitutional error is a due process violation based on outrageous government conduct, which requires that “defendants . . . show conduct that violates due process in such a way that it is so grossly shocking and so outrageous as to violate the universal sense of justice.” United States v. Stinson, 647 F.3d 1196, 1209 (9th Cir. 2011) (internal citation and quotation marks omitted). “The defense is therefore limited to extreme cases in which the government's conduct violates fundamental fairness.” Id. (internal citation and quotation marks omitted).

         Dismissal of an indictment under the court's inherent supervisory authority “is appropriate only if it is established that the violation substantially influenced the grand jury's decision to indict, or if there is grave doubt that the decision to indict was free from the substantial influence of such violations.” Bank of Nova Scotia, 487 U.S. at 256 (citation and internal editorial marks omitted); see also United States v. Navarro, 608 F.3d 529, 539 (9th Cir. 2010). This standard requires a harmless-error inquiry unless “the structural protections of the grand jury have been so compromised as to render the proceedings fundamentally unfair, allowing the presumption of prejudice.” Bank of Nova Scotia, 487 U.S. at 257 (listing two examples of structural error: Vasquez v. Hillery, 474 U.S. 254 (1986), where there was racial discrimination in grand juror selection; and Ballard v. United States, 329 U.S. 187 (1946), where women were excluded from the grand jury).

         B. Application

         The Kealohas argue that an Assistant United States Attorney (“AUSA”) engaged in misconduct during grand jury proceedings by having an FBI agent inform the grand jury that Gerard Puana (“Puana”)[3] had passed a polygraph examination. ECF No. 312-1 at 2. The Kealohas also essentially argue that the AUSA engaged in misconduct when the AUSA “allowed” a grand juror to ask whether Katherine Kealoha's grandmother's home was foreclosed upon. See ECF No. 312-1 at 3. In his joinder, Hahn further argues that the government perpetuated its misconduct by including information about the polygraph results in Hahn's and Nguyen's Criminal Complaints. ECF No. 364 at 2.[4]

         1. Polygraph Evidence

         Under the test first articulated in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923), the Ninth Circuit has historically “expressed [its] hostility to the admission of unstipulated polygraph evidence . . . [which] culminated in the adoption of a ‘bright line rule' excluding all unstipulated polygraph evidence offered in civil or criminal trials.” United States v. Cordoba, 104 F.3d 225, 227 (9th Cir. 1997) (“Cordoba I”) (citations omitted). However, after Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) found that Federal Rule of Evidence 702 (and not Frye) governed admission of scientific expert testimony, the Ninth Circuit held that “[t]he per se Brown rule excluding unstipulated polygraph evidence [was] inconsistent with the ‘flexible inquiry' assigned to the trial judge by Daubert.” Cordoba I, 104 F.3d at 227. Subsequently, a number of district courts have conducted this “flexible inquiry” and excluded polygraph evidence at trial, and the Ninth Circuit has affirmed those rulings. See, e.g., United States v. Seideman, 485 Fed.Appx. 190, 194 (9th Cir. 2012) (unpublished); United States v. Benavidez-Benavidez, 217 F.3d 720, 725 (9th Cir. 2000); United States v. Cordoba, 194 F.3d 1053, 1063 (9th Cir. 1999) (“Cordoba II”).

         That said, the Federal Rules of Evidence do not apply in the context of grand jury proceedings, except for privilege protections. See Fed. R. Evid. 1101(d)(2). Accordingly, neither the old “bright line” rule nor Daubert applies here. See Brown v. Darcy, 783 F.2d 1389, 1394, 1396 n.13 (9th Cir. 1986), overruled by Cordoba I; Daubert, 509 U.S. at 587-88. Further, federal courts have, at least in some instances, allowed the results of polygraph examinations to be presented to grand juries. See 1 Fed. Grand Jury § 7:14 (2d ed.) (“[A] grand jury can hear evidence that could not be admitted at trial. ...


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