State of Oregon v Martin Jay Shain motion to dismiss for prosecutorial misconduct by Eder Campuzano

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IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF MARION

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STATE OF OREGON,

Plaintiff, Case No. 16CR53578

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v. MARTIN JAY SHAIN,

MOTION TO DISMISS AMENDED INDICTMENT FOR PROSECUTORIAL MISCONDUCT

Defendant.

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Defendant Martin Shain moves to dismiss the Amended Indictment with prejudice due to the State’s egregious and incurable prosecutorial misconduct.

1. INTRODUCTION

This Court should dismiss both counts of the Amended Indictment with prejudice

because the State has seriously violated Oregon’s rules of professional conduct, along with

violating Mr. Shain’s constitutional right against unreasonable search and seizure, constitutional

right to counsel, and constitutional right against self-incrimination. The State’s misconduct is so

severe that dismissal of the Amended Indictment, with prejudice, is the only appropriate remedy.

In August 2015, the State issued a civil investigative demand to Mr. Shain, demanding

that Mr. Shain appear in Oregon to give sworn testimony regarding the alleged forgery that is at

the heart of this case. In response, Mr. Shain retained counsel, who notified the State that Mr.

Shain was represented by counsel. The State confirmed in writing that Mr. Shain was

represented by counsel. But soon thereafter, the State and FBI coerced Mr. Shain’s friend and

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professional colleague, Robert Simonton, into questioning Mr. Shain, via telephone, regarding

the precise topics noticed in the State’s civil investigative demand. Unbeknownst to Mr. Shain,

the State and FBI fed Mr. Simonton questions—and secretly monitored and recorded their

telephone call—in an unsuccessful attempt to trick Mr. Shain into admitting that he had forged

the documents at issue in this case. In doing so, the State violated Mr. Shain’s constitutional

rights and RPC 4.2, which prohibits communications with represented parties regarding the

subject of their representation. Moreover, the State violated Oregon, Washington, and Utah wiretapping statutes by

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recording the telephone conversation between Mr. Shain and Mr. Simonton without consent.1

Washington law requires that all parties consent to wiretapping; Utah and Oregon require single-

party consent. Here, the choice of law does not matter, because the State coerced Mr. Simonton

into placing the call. Mr. Simonton did not consent to the State’s recording of the call within the

meaning of the Utah, Washington, or Oregon wiretapping statutes. Regardless of which law

applies, the State committed a crime by recording Mr. Simonton’s call to Mr. Shain without

consent. This extreme and outrageous prosecutorial misconduct warrants dismissal. 2. FACTUAL BACKGROUND

The State issued a civil investigative demand to Mr. Shain on August 14, 2015. The civil

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investigative demand required Mr. Shain to appear in Portland, Oregon to provide testimony

regarding alleged fraud “in the form of submission made to the Oregon Department of Energy to

seek an extension of the Oregon University System’s solar panel array (“Solar by Degrees”

photovoltaic power) project deadline in 2011-2012.” November 30, 2016 Declaration of Marilyn

Stacey (“Stacey Decl.”), Exhibit A. That same day, August 14, 2015, Mr. Shain’s counsel informed the State that Mr. Shain

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was represented by counsel with respect to the allegations of fraud concerning the OUS solar

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Mr. Simonton was in Utah at the time of the call. Mr. Shain was in Washington.

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it gets harder.” At the State’s behest, Mr. Simonton repeatedly tried to elicit a forgery confession

from Mr. Shain, asking and demanding, variously:

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You have to explain the RedCo letter. You need to tell me, Martin, did you have anything to do with creating this letter? Did RedCo do this work that’s on this invoice on this project? [T]he one question they keep asking me, did RedCo do this work on this invoice at all these different sites? It’s all coming down from this stupid letter from RedCo, or allegedly from RedCo, ‘cause the FBI is saying that, you know, this isn’t Ryan Davies’s signature. They analyzed it. So where’d the letter come from, then, if not Ryan Davies? [W]hy did you need the RedCo letter? I mean that doesn’t make sense. Their point is, that the rules changed and put all that in jeopardy and so they’re making accusations that . . . this letter was fabricated to keep it going. You’re the easy one to blame. I mean, they’re telling me you got paid two and a half million dollars or something. You know what they’re doing—they’re looking at now you’ve got two and a half million and they have false docs saying that work was done. [I]f they only have these two documents in their file, what else did you give them? Why would [ODOE] keep these two pieces of paper and not the other stuff you gave them? Is [O]DOE, are they culpable for these false documents? I mean, once they received them, is it their responsibility? You gave [ODOE] pictures and engineering studies, and all that. Who’d you give them to, do you remember this? I mean, otherwise, you know, it’s just your word.

14 See November 30, 2016 Declaration of Annie Lahaie (“Lahaie Decl.”), Ex. 1. Despite this 15 constant browbeating, the State’s hopes of obtaining a confession were dashed. Mr. Shain 16 steadfastly maintained his innocence and forcefully expressed his indignation at the cavalier and 17 high-handed accusations that were being leveled against him. 18 3. ARGUMENT 19 a. The State’s Use of Mr. Simonton to Interrogate Mr. Shain Violated RPC 4.2 20 Stymied in its effort to question Mr. Shain by means of a civil investigative demand, the 21 State then used Mr. Simonton to do what the State ethically could not do—interrogate Mr. Shain 22 about the alleged forgery. The State’s conduct violated RPC 4.2 because the State knew that Mr. 23 Shain was represented by counsel, and the State caused Mr. Simonton to communicate with Mr. 24 Shain regarding the subject of Mr. Shain’s representation. 25 RPC 4.2 provides, in relevant part, that “a lawyer shall not communicate or cause another 26 Page 4 - MOTION TO DISMISS AMENDED INDICTMENT FOR PROSECUTORIAL MISCONDUCT Ball Janik LLP 1088854\v1

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it gets harder.” At the State’s behest, Mr. Simonton repeatedly tried to elicit a forgery confession

from Mr. Shain, asking and demanding, variously:

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    

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   

 

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101 SW Main Street, Suite 1100 Portland, Oregon 97204-3219 Telephone 503.228.2525

to communicate on the subject of the representation with a person the lawyer knows to be

represented by a lawyer on that subject unless: (a) the lawyer has the prior consent of a lawyer

representing such other person; [or] (b) the lawyer is authorized by law or by court order to do

so.” The fact that the State used Mr. Simonton to conduct an interrogation of Mr. Shain does not

relieve the State of its ethical obligations because RPC 4.2 expressly prohibits the State from

“caus[ing] another to communicate” with a represented party on the subject of his representation.

The State did not have permission from Mr. Shain’s counsel to communicate with Mr.

Shain regarding the alleged forgery, nor did any law or court order permit the State to initiate

such contact with Mr. Shain. Indeed, the Oregon Supreme Court recently ethically sanctioned an

attorney for lesser conduct. In re Newell, 348 Or. 396, 413 (2010) (holding that a public

reprimand is the minimum sanction for a violation of RPC 4.2).

The facts in Newell are instructive because that case, like this one, involved parallel civil

and criminal proceedings. In Newell, an accountant, James Fahey, embezzled money from his

employer, Greenwood Forest Products (“Greenwood”), and disguised his theft, in part, by

creating fictitious inventory accounts. Id. at 398. Later, another company, Jewett-Cameron,

agreed to purchase Greenwood Forest Products’ assets, including its inventory. Id. Jewett-

Cameron’s auditors subsequently discovered that Greenwood had overstated its inventory and

that Mr. Fahey had embezzled money from both Greenwood and Jewett-Cameron. Jewett-

Cameron sued Greenwood, alleging that Jewett-Cameron had overpaid for Greenwood’s assets

because of the fictitious inventory accounts. Id.

Meanwhile, the State brought criminal charges against Mr. Fahey. Mr. Fahey retained an

attorney in the criminal action and pleaded guilty to ten counts of theft. As part of his plea

agreement, Mr. Fahey agreed to cooperate with Greenwood’s efforts to locate its missing assets,

so the trial court delayed the sentencing to give Mr. Fahey time to comply. While Mr. Fahey

was awaiting criminal sentencing, Jewett-Cameron’s attorney served a civil deposition subpoena

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on Mr. Fahey at 6:35 p.m. on a Friday evening, purporting to compel Mr. Fahey’s attendance at a

civil deposition that was to commence the next day—Saturday—at 9 am. Mr. Fahey appeared at

the deposition without his attorney, and Mr. Fahey protested that he had not had a chance to

consult with his counsel. Jewett-Cameron’s attorney nevertheless proceeded to question Mr.

Fahey about the events giving rise to the criminal and civil cases. Id. at 398-404.

The bar filed disciplinary proceedings against Jewett-Cameron’s attorney, Mr. Newell,

alleging that Jewett-Cameron’s attorney had violated RPC 4.2 by questioning Mr. Fahey outside

the presence, and without the permission of, Mr. Fahey’s counsel. The trial panel held that

Jewett-Cameron’s attorney had violated RPC 4.2, which covers “instances such as the present

case in which the [a]ccused knew the witness to be represented in a pending criminal proceeding

but nevertheless proceeded to interrogate the witness on that subject.” Id. at 405. The Supreme

Court held that the civil and criminal cases involved a common “subject”—whether

Greenwood’s books were overstated. Id. at 406 (adopting an expansive definition of “subject”

for purposes of RPC 4.2.)

So too here. The “subject” of the State’s civil and criminal cases against Mr. Shain is the

submission of certain forged documents to the Oregon Department of Energy. The State knew

that Mr. Shain was represented by counsel on the subject of the State’s investigation, but the

State and FBI proceeded to interrogate Mr. Shain anyway, in violation of RPC 4.2.

Indeed, the State’s conduct in this case is even more egregious than the conduct at issue

in In re Newell. Here, the State is the complainant in both the civil and criminal cases. In In re

Newell, Mr. Fahey was merely a third-party witness in the civil case between Greenwood and

Jewett-Cameron. In taking Mr. Fahey’s deposition, Jewett-Cameron’s attorney was not seeking

to use the testimony he obtained directly against Mr. Fahey. Here, by contrast, the State sought

to use its covert interrogation of Mr. Shain against Mr. Shain in the State’s civil and criminal

cases. A public reprimand of the Oregon Department of Justice lawyers handling the criminal

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without consent, and without a court order, violated Mr. Shain’s Fourth Amendment and Article

1, Section 9 rights.

In addition, the State violated Mr. Shain’s Fifth and Sixth Amendment rights—and the

associated rights set forth in the Oregon Constitution—by interrogating Mr. Shain (through Mr.

Simonton) in spite of the fact that Mr. Shain had retained counsel and announced his intention to

invoke his right to remain silent. The right to counsel and the right to remain silent are

interrelated. See State v. Randant, 341 Or. 64, 70 (2006) (the right to counsel protects against

“involuntary confessions.”) In 2011, the Oregon Supreme Court held that the right to counsel

does not attach until the beginning of “criminal proceedings,” which commence upon arrest or

the filing of formal charges. Oregon v. Davis, 350 Or. 440, 479 (2011). There, the Supreme

Court held that a defendant only has the right against self-incrimination when the defendant is in

custody or other “compelling circumstances.” Id. at 460. Here, unlike in the Davis case, Mr.

Shain was in compelling circumstances. Specifically, on August 14, 2015, the State ordered Mr.

Shain to appear in person to testify regarding the alleged forgery. Stacey Decl. Ex. A. In

response, Mr. Shain retained counsel and invoked his constitutional right to remain silent.

Rather than respecting Mr. Shain’s constitutional rights, the State illegally and unethically forced

Mr. Simonton to interrogate Mr. Shain on the State’s behalf, with the State secretly listening and

recording the conversation. This Court should not countenance the State’s improper attempt to

circumvent Mr. Shain’s constitutional rights.

d. The Appropriate Remedy for the State’s Misconduct is Dismissal With Prejudice

“It is the duty of the attorney for the state to see that the defendant has a fair trial.” State

v. Seeger, 4 Or.App. 338-39 (1971). Here, the State’s repeated violations of its ethical

obligations and Mr. Shain’s constitutional rights, if left unsanctioned, will deny Mr. Shain due

process. State v. Hendershott, 131 Or.App. 531, 535 (1994) (dismissal a possible sanction when

outrageous government conduct violates due process.) The ordinary remedy, suppression of the

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improperly obtained evidence, is inadequate in this case because the evidence is exculpatory.

See State v. Zinsli, 156 Or.App. 245 (1998) (noting that the “customary sanction for

unconstitutional police conduce generally requires suppression of the related evidence,” but

recognizing that courts must sometimes impose alternative sanctions.)

When the government inadvertently destroys exculpatory evidence, dismissal can be an

appropriate remedy. See, e.g. State v. Michener, 25 Or.App. 523 (1976) (affirming trial court’s

dismissal of charges as sanction for prosecution’s failure to preserve exculpatory evidence).

Here, the State’s conduct toward Mr. Shain is much worse. The State intentionally and in bad

faith disregarded Mr. Shain’s constitutional rights, and the State’s lawyers handling the criminal

investigation violated their ethical obligations under RPC 4.2. Finally, the State ran afoul of the

criminal wiretapping statutes of Oregon, Utah, and Washington. Given the multiple

constitutional, statutory, and ethical rights the State has trampled upon, the only meaningful

remedy for such extreme and outrageous conduct is dismissal of the amended indictment, with

prejudice.

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CONCLUSION

The State violated RPC 4.2 by secretly communicating with Mr. Shain about the subject

of his representation, even though the State knew Mr. Shain was represented by counsel.

Moreover, the State violated the criminal wiretapping statutes of Oregon, Utah, and Washington

because the State recorded the telephone conversation between Mr. Shain and Mr. Simonton

without consent. Finally, the State violated Mr. Shain’s constitutional rights to be free from

unreasonable searches and seizures, refrain from self-incrimination, and to have the effective

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CERTIFICATE OF SERVICE

I hereby certify that on November 30, 2016, I directed the foregoing MOTION TO

DISMISS AMENDED INDICTMENT FOR PROSECUTORIAL MISCONDUCT to be

electronically filed with the Marion County Circuit Court and served a copy by first class mail on

the following:

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Colin Benson Senior Assistant Attorney General Oregon Department of Justice 2250 McGilchrist Street SE, Suite 100 Salem, OR 97302 PH: (503) 378-6347 Email: Colin.D.Benson@doj.state.or.us DATED: November 30, 2016 s/ James T. McDermott James T. McDermott, OSB No. 933594 Attorney for Defendant

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