United States District Court for the District of New Mexico Finds Character is Not “In Issue” in a Fraud Case

Federal Rule of Evidence 405(b) states that

When a person’s character or character trait is an essential element of a charge, claim, or defense, the character or trait may also be proved by relevant specific instances of the person’s conduct.

So, when is a person’s character an essential element of a charge, claim, or defense? According to some courts, character is an essential element of a charge, claim, or defense

when it is “a material fact that under the substantive law determines rights and liabilities of the parties.”…In such a case the evidence is not being offered to prove that the defendant acted in conformity with the character trait; instead, the existence or nonexistence of the character trait itself “determines the rights and liabilities of the parties.”… In a defamation action, for example, the plaintiff’s reputation for honesty is directly at issue when the defendant has called the plaintiff dishonest. Perrin v. Anderson, 784 F.2d 1040, 1045 (10th Cir. 1986).

I prefer a formulation that says that character is an essential element of a charge, claim, or defense when evidence of character is necessary to prove/disprove a charge, claim, or defense. For instance, in a negligent hiring/supervision case, how do you prove that a city was negligent in hiring/supervising a bus driver with a history of drunk driving? Answer: by presenting evidence of the bus driver’s history of being a drunk driver. How does a newspaper facing a defamation lawsuit prove the truth of its allegation that a politician is an adulterer? Answer: By presenting evidence of his acts of adultery. How does the State disprove the “lack of predisposition” portion of a defendant’s entrapment defense? Answer: By presenting evidence of his prior related crimes. How does a defendant prove an insanity based upon delusional thinking? Answer: By presenting evidence of his delusion.

As far as I can tell. the above five cases are the main five cases covered by Federal Rule of Evidence 405(b). But what about a fraud case?

In United States v. Boutte, 2019 WL 4261745 (D.N.M. 2019), three defendants were charged with fraud. One of the defendants moved to introduce specific acts of his good conduct under Rule 405(b). The State moved to exclude it, and the court agreed, concluding that

Defendant Boutte’s good character is neither essential element of, nor a defense to, claims of conspiracy to defraud the government, conspiracy to commit wire fraud, and false claims against the government. See United States v. White, 737 F.3d 1121, 1137 (7th Cir. 2013) (concluding that a defendant’s law-abidingness, or lack thereof, is not an essential element of a wire fraud charge, nor a defense to it); United States v. Marrero, 904 F.2d 251, 260 (5th Cir. 1990) (concluding that character is “simply not an essential element” of charges of criminal insurance fraud); United States v. Pantone, 609 F.2d 675, 680 (3d Cir. 1979) (concluding that character is not an essential element of a Racketeer Influenced and Corrupt Organizations Act charge); see also United States v. Keiser, 57 F.3d 847, 856 (9th Cir. 1995) (“The relevant question should be: would proof, or failure of proof, of the character trait by itself actually satisfy an element of the charge, claim, or defense? If not, then character is not essential and evidence should be limited to opinion or reputation.”). Whether Defendant Boutte has displayed good character at certain points in his life is irrelevant to the charges contained in the indictment….

Defendant Boutte cites one unpublished case from the United States District Court for the Eastern District of Washington, United States v. Tangen, No. 2:15-cr-73, 2016 WL 3676451, at *2 (E.D. Wa. July 7, 2016), to support his proposition that specific instances of defendant’s truthful or honest conduct are admissible under Rule 405(b) when fraud is an essential element of the charges. Tangen appears not only incorrectly decided, but also contrary to Ninth Circuit precedent on the issue. See Keiser, 57 F.3d at 856 (stating that evidence should be limited to opinion or reputation unless proof of the character trait by itself actually satisfies an element of the charge). Tangen did not cite to any case law to support its position on Rule 405. Rather, it cites to an Eleventh Circuit decision, that said “[e]vidence of a criminal defendant’s ‘pertinent’ character trait—such as honesty and truthfulness in a fraud case—is admissible.” United States v. Hough, 803 F.3d 1181, 1190 (11th Cir. 2015). Hough was quoting Rule 404(a)(2)(A) and 405(a), not Rule 405(b). The very next sentence of Hough reads: “To elicit such evidence, defense counsel may ask a witness who has heard of the defendant about the defendant’s reputation for the pertinent character trait.” Id. at 1191 (emphasis added). Hough continues: “Defense counsel may also ask a witness who knows the defendant to give his opinion of the defendant’s character as it relates to the pertinent trait.” Id. (emphasis added). Nothing in Hough allows defense counsel to probe for specific instances of good conduct.

-CM