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Second Circuit Provides Primer on Criminal Procedure in Methamphetamine Case

United States v. Lyle

In United States v. Lyle, 15-958-cr (Raggi, Chin, Lohier), the Second Circuit covered an array of criminal procedure issues—including the Fourth Amendment concerns associated with rental car searches, proffer agreement waivers, and the admissibility of a co-defendant’s confession—in the course of affirming the defendants’ narcotics conspiracy convictions.  Lyle leaves unresolved the issue of whether an unauthorized driver ever has a reasonable expectation of privacy in a rental car.  It does provide, however, an important reminder of the potential pitfalls of proffer agreements and the challenges that arise when trying multiple defendants together.

Background and the Decision Below

Throughout 2013, James Lyle and Michael Van Praagh regularly sold methamphetamine in the New York area.  Van Praagh often sold pound quantities of the drug out of Manhattan hotels and sold smaller quantities to Lyle, who in turn distributed methamphetamine to his own clients.  They were both arrested on several occasions and found to be in possession of methamphetamine, large amounts of cash, and other paraphernalia associated with the sale of controlled substances.  For example, on May 30, 2013, Van Praagh checked out of a Midtown hotel after a night of dealing and accidentally left behind approximately one pound of methamphetamine and $20,000 in the hotel room safe.  Van Praagh made a poor decision to return to collect the contraband, as he was greeted at the hotel and then arrested by the New York City Police Department (“NYPD”).

Lyle was also arrested on multiple occasions.  On December 11, 2013, the NYPD observed him park and exit a vehicle with a knife clipped to his pants.  The officers ultimately determined that the vehicle was a rental car for which Lyle was not an authorized driver under the rental agreement and arrested him for driving with a suspended license and for possessing an illegal gravity knife.  When the police conducted an inventory search of the vehicle after impounding it, they discovered over one pound of methamphetamine and approximately $39,000 in cash.  While he was in custody on the charges, Lyle admitted that Van Praagh had placed a package in the trunk of the rental vehicle and asked Lyle to hold onto it for him.  Lyle confessed that although he did not see what was in the package, he presumed it was drugs because he knew that Van Praagh distributed large quantities of methamphetamine and Lyle occasionally delivered drugs to customers on Van Praagh’s behalf.  A few weeks later, on January 9, 2014, Lyle was arrested for a second time in a New Jersey hotel room.  During a consent search of the room, the police found fourteen grams of methamphetamine, $3,270 in cash, and drug paraphernalia (a digital scale and numerous plastic baggies).

In March 2014, Van Praagh and Lyle were indicted on multiple narcotics charges, including conspiracy, and arrested.  On April 7, 2014, Lyle participated in a proffer session with the government, during which he admitted, that he occasionally delivered packages to Van Praagh’s clients, that he accompanied Van Praagh to pick up and deliver methamphetamine thirty to fifty times, and that Van Praagh had told Lyle his supplier was in Arizona.  Lyle signed a proffer agreement that provided him with limited use immunity for his statements but also included a waiver provision that allowed the government to use those statements against Lyle at trial if certain conditions were met.

Before trial, Lyle moved to suppress the physical evidence recovered during the search of the rental car.  After a hearing, the District Court (Crotty, J.) denied his motion, holding that he did not have a reasonable expectation of privacy in the rental car because he was not an authorized driver under the rental agreement.  Both defendants proceeded to trial on the charges against them.  During his opening statement, Lyle’s counsel disputed that Lyle was a methamphetamine dealer.  As a result, the District Court ruled that Lyle’s proffer statements were admissible against him, provided the government omitted any mention of Van Praagh’s name, consistent with the rule in Bruton v. United States.  The District Court also admitted Lyle’s post-arrest statements, redacting Van Praagh’s name and issuing a limiting instruction to the jury explaining that these statements could not be used against Van Praagh.  The District Court also permitted the government to enter into evidence the items seized during Lyle’s New Jersey arrest. 

On October 20, 2014, the jury convicted both defendants on all counts.  On March 25, 2015, the District Court sentenced Lyle to the statutory mandatory minimum of 120 months’ imprisonment and sentenced Van Praagh to a below-guidelines sentence of 144 months’ imprisonment.

Discussion

Both defendants appealed on multiple grounds and the Second Circuit addressed the following issues in the course of affirming their convictions:  (1) whether Lyle had a reasonable expectation of privacy in the rental car; (2) the interpretation of Lyle’s proffer agreement; (3) the sufficiency of the redactions to Lyle’s proffer statements; (4) the admissibility of Lyle’s New Jersey arrest; (5) the sufficiency of the conspiracy evidence against Van Praagh; and (6) the reasonableness of Van Praagh’s sentence.

Reasonable Expectation of Privacy in a Rental Car

Judge Chin, writing for the panel, began by addressing an issue of first impression in the Second Circuit:  whether an unauthorized driver of a rental car has a reasonable expectation of privacy in the car.  The Court first reviewed the decisions of other circuits regarding this question, noting that a majority of circuits, including the Third, Fifth, Fourth, and Tenth, have answered in the negative.  The Eighth and Ninth Circuits, however, have held that an unauthorized driver does have a reasonable expectation of privacy in a rental car if the authorized driver gave him or her permission to use the car. Other circuits have refused altogether to adopt a bright-line test.  For example, in United States v. Smith,[1] the Sixth Circuit looked to a variety of factors, including the driver’s relationship to the renter, whether the driver had permission from the renter to use the car, whether the driver was licensed, and whether the driver had paid for the rental car.

Ultimately, the Court rejected all of these approaches and followed the Seventh Circuit’s reasoning in United States v. Haywood,[2] which rejected the proposition that the driver of a rental car could have a reasonable expectation of privacy in the car where he was both an unauthorized and an unlicensed driver.  The Court noted that because Lyle’s license was suspended, his use of the rental car was not only unauthorized, but unlawful, and that no rental company with knowledge of the relevant facts would have given him permission to use the car.  The Court distinguished Smith based on the unique facts presented in that case, namely that the unauthorized driver was the renter’s husband and had paid for the vehicle.  The Court concluded that the impoundment and subsequent inventory search of the rental car did not violate Lyle’s Fourth Amendment rights and affirmed the District Court’s denial of the motion to suppress.

Proffer Agreement Waiver

The Court next turned to Lyle’s challenge to the District Court’s ruling on the scope of his proffer agreement waiver.  The Court explained that a defendant will be found to have waived his limited use immunity under the agreement where he has knowingly and voluntarily elicited evidence or made a factual assertion that is fairly rebutted by his proffer statements.  The Court noted that it recently provided examples of factual assertions that will trigger a proffer waiver in United States v. Rosemond,[3] including “asserting, in an opening statement that someone other than the defendant was the real perpetrator of the crime,” and “arguing that a shooting was an intended kidnapping gone wrong, when the defendant admitted in a proffer session that the shooting was an intentional murder.”

Applying this standard to the instant case, the Court concluded that Lyle had waived the protections of his proffer agreement when his counsel declared during opening statements:  “we dispute [] the idea that [Lyle] was a dealer.”  Counsel’s statement had done more than challenge the sufficiency of the government’s evidence—it was the functional equivalent of an affirmative statement that Lyle did not deal methamphetamine, which was belied by Lyle’s admissions during his proffer session.  For example, Lyle admitted that he distributed “small packages” of methamphetamine, accompanied Van Praagh to obtain and deliver methamphetamine, and knew the location of Van Praagh’s supplier.  As such, the Court concluded that his proffer statements fairly rebutted his counsel’s opening arguments and held that the District Court had been justified in admitting Lyle’s proffer statements at trial.

Admissibility of Co-Defendant’s Confession

Having held that Lyle’s proffer statements were properly admitted against him, the Court went on to consider whether the redaction of these statements was sufficient to protect Van Praagh’s Sixth Amendment rights.[4]  In Bruton v. United States, [5] the Supreme Court recognized that the admission of a non-testifying co-defendant’s confession naming the defendant as a perpetrator at their joint trial violates the Confrontation Clause of the Sixth Amendment.  The Second Circuit has long held, however, that the introduction of a co-defendant’s confession with the defendant’s name replaced by a neutral noun or pronoun does not violate Bruton.  If, when viewed separately from the other evidence admitted at trial, the redacted confession does not incriminate the defendant, it may be admitted with a proper limiting instruction.

The Court ultimately concluded that the redactions to Lyle’s post-arrest and proffer statements were sufficiently neutral as to satisfy this test.  In so holding, the Court distinguished its previous ruling in United States v. Taylor,[6] upon which Van Praagh relied.  In Taylor, four individuals were accused of robbing a drug store.  During a joint trial of three co-defendants, one defendant’s confession was admitted and redacted to replace the two co-defendants’ names with the words “two other individuals,” although it still named both the defendant and the co-operating witness.  The Taylor court concluded that under these circumstances, where there were only four individuals accused and the redactions made clear that two individual’s names had been omitted from the confession, the statements violated Bruton.  The panel noted that unlike the statements at issue in Taylor, Lyle’s statements referenced multiple unnamed individuals and thus the jury could not engage in a simple process of elimination to conclude that Lyle had named Van Praagh in his confession.  The Court further noted that the District Court had given an appropriate limiting instruction.  

Admissibility of Prior Arrest

Next, the Court considered Lyle’s challenge to the admissibility of his New Jersey arrest.  The Court explained that although Federal Rule of Evidence 404(b) bars the admission of prior bad acts to prove a defendant’s propensity to commit the crime with which he is charged, under Second Circuit law, evidence of uncharged criminal activity may be admitted if it arose out of the same transaction or series of transactions as the charged offenses.  The Court held that Lyle’s New Jersey arrest met this standard: the New Jersey arrest did not constitute evidence of Lyle’s prior crimes, but was evidence of the very conspiracy with which Lyle had been charged.  The Court further noted, in the alternative, that the New Jersey arrest fit within the confines of the Rule 404(b) inclusionary rule because it could be admitted to establish Lyle’s knowledge and intent, rather than propensity, and its probative value for this purpose substantially outweighed the risk of unfair prejudice to Lyle.

Sufficiency of the Evidence – The Buyer-Seller Exception

The Court then turned to Van Praagh’s challenge to the sufficiency of the evidence against him to support his conspiracy conviction.  The Court first noted that the mere existence of a buyer-seller relationship between two individuals is not sufficient to establish a narcotics conspiracy, although such a conspiracy may be proven by additional evidence of an agreement between the parties to distribute controlled substances.  The District Court did not provide the jury with an instruction explaining this buyer-seller exception at trial because Van Praagh did not request one.  The Court concluded, however, that the failure to include such an instruction did not constitute plain error because there was ample additional evidence of a narcotics conspiracy presented at trial.  For example, the government presented evidence that Van Praagh sold methamphetamine to multiple customers in addition to Lyle.  Furthermore, the quantity of drugs that Lyle purchased from Van Praagh on a regular basis was consistent with a drug-trafficking operation.  The buyer-seller instruction is not required in every two defendant narcotics case, but only when the circumstances warrant.

Sentencing Challenge

Finally, the Court considered Van Praagh’s argument that he should have received the same sentence as Lyle.  The Court explained that in order to establish that his sentence was substantively unreasonable, Van Praagh would need to show that his below-guidelines sentence of 144 months’ imprisonment constituted a “manifest injustice.”  The Court noted, however, that the District Court had dutifully explained its reasoning for the disparate sentences, explaining that although Van Praagh had an unhappy upbringing, he had played a larger role in the conspiracy than Lyle and had a more significant criminal history.  The Court therefore concluded that the District Court had not abused its discretion in sentencing Van Praagh to a slightly longer term than Lyle.

Analysis

Lyle serves as a reminder of the risks posed when deciding whether to participate in a proffer session.  Where there is a possibility that the case may proceed to trial, defense counsel’s strategy will be curtailed by the client’s prior admissions.  Counsel must proceed with caution when challenging the sufficiency of the government’s evidence under such circumstances in order to avoid a potential waiver of the proffer agreement’s protections.  On the heels of Rosemond, this decision gives further guidance to a defendant who has proffered about what can and cannot be said, lest the defense open the door to the admission of the proffer statements.

This case also provides a helpful illustration of the difficulties defense attorneys face when litigating a multi-defendant trial.  Counsel should pay careful attention to the division of the government’s evidence between defendants and request limiting instructions where appropriate.  Bruton seems almost a test of how much weight we are willing to put on the jury’s supposed adherence to these instructions.  It seems as if the Court will not reverse on Bruton grounds unless the jury could not possibly avoid concluding that the unnamed individuals include the trial defendant.

The defense bar should also note with caution the Court’s passing observation in a footnote that it was unaware of any precedent establishing that an objection by a co-defendant preserves a defendant’s subsequent appeal on an issue.  If applied, this principle would over-complicate issues at trial.  Do district judges really need to hear three or four defense lawyers make the same arguments seriatim in order to understand and rule on the basis for an objection?  Does the government need the same in order not to be prejudiced?  The better default rule would be for the Court to treat a single defense objection as sufficient to preserve the issue unless there is some reason, specific to the facts, why this should not be so (such as when one defendant makes use at trial of the challenges evidence, or specifically waives the right to object to the evidence).

Finally, the Court left the door partially open for future challenges to rental car searches by unauthorized drivers when it refused to adopt either of the bright-line tests established by other circuits.  In effect, the panel failed to announce a rubric for deciding this issue and limited its ruling to the unique circumstances of Lyle’s conduct—he was both an unauthorized and an unlawful driver.  Although the Court also declined to follow the Sixth Circuit’s multi-factor test, it did take the time to distinguish Smith from the instant case.  It is perhaps best that the multi-factor test was not adopted, as these rules are meant to guide police practices in the field, and multi-factor tests give less certain guidance than does a bright-line rule.  It will be interesting to see in the next case whether the Second Circuit is willing to adopt a more fact-based or rule-based approach in the context of future Fourth Amendment challenges to searches of rental cars driven by unauthorized (but licensed) drivers.

-By Jackie Bonneau and Harry Sandick


[1] 263 F.3d 571 (6th Cir. 2001).

[2] 324 F.3d 514 (7th Cir. 2003).

[3] 841 F.3d 95 (2d Cir. 2016).  Our post on Rosemond can be found at https://www.secondcircuitblog.com/second-circuit-clarifies-scope-of-proffer-agreement-waivers/, and we also wrote about the opinion in the New York Law Journal.  See Harry Sandick & Helen P. O’Reilly, “Second Circuit Clarifies Scope of Proffer Agreement Waivers,” N.Y.L.J., Nov. 29, 2016.

[4] The Court reviewed Van Praagh’s Sixth Amendment challenge for plain error because his counsel did not object to the admission of the redacted statements at trial.  Although Lyle’s counsel had objected to their admission, the Court noted in a footnote that “Van Praagh cites no authority suggesting that one party’s counsel may preserve another party’s claim of error when the other party’s counsel fails to timely join in the objection.”

[5] 391 U.S. 123 (1968).

[6] 745 F.3d 15 (2d Cir. 2014).