United States v. Mark Hazelwood, Heather Jones, Scott Wombold (6th Cir. October 2020)

The Federal Docket

October 26, 2020

Evidence – A decision by a district court to admit inflammatory statements by a defendant  to rebut testimony of the defendant’s good business judgment is not harmless error when it is irrelevant, extrinsic bad acts evidence to prove propensity; and the prejudicial nature outweighs its probative value under Rules 401, 404 and 403.

Mark Hazelwood, Heather Jones, and Scott Wombold were convicted on varying counts of mail fraud and conspiracy to commit wire fraud under 18 U.S.C. § 1343 and 1341 based on their company’s rebate program, which was offered to customers to increase gasoline sales.  In cross-examining a government witness, the defendant’s attorney questioned the witness about Hazelwood’s reputation as manager and president within the company.  To rebut the witness testimony of good business judgment, the government presented video evidence of inflammatory statements Hazelwood made during an offsite work event to prove motive that the executive would put the business at risk.

The Court reviewed the defendants’ challenge to the admission of the rebuttal evidence and held it was not harmless error due to its irrelevance, its use to prove propensity, and its prejudicial effect.  The Court held that a video showing defendants spewing profanities about African Americans and women was personal belief and, while despicable, did not correlate to good business judgment (citing anti-Semitic Henry Ford as an example). The Court held the video was extrinsic evidence of motive despite defendant’s defense based on lack of knowledge, so it had no other purpose than to prove propensity.  The Court concluded that the district court admission of the video evidence was not harmless error and reversed the convictions.

Judge Donald dissented, arguing that the evidence was relevant as rebuttal evidence to business judgment since it occurred during an informal business gathering; was proper extrinsic evidence to rebut facts of consequence of intelligence and sensibility; and the probative value outweighed prejudicial effect since the jury acquitted multiple charges based on evidence not emotion, and the decision by the district court should be upheld.

Appeal from the Eastern District of Tennessee at Knoxville

Opinion by Suhrheinrich, joined by Murphy. 

 Dissent by Donald.

Click here to read the opinion.

 

Tom Church - Tom is a trial and appellate lawyer focusing on criminal defense and civil trials. Tom is the author of "The Federal Docket" and is a contributor to Mercer Law Review's Annual Survey in the areas of federal sentencing guidelines and criminal law. Tom graduated with honors from the University of Georgia Law School where he served as a research assistant to the faculty in the areas of constitutional law and civil rights litigation. Read Tom's reviews on AVVO. Follow Tom on Linkedin.

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