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Ncr. 93-15455

IN THE
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

In re HAMILTON TAFT & Co.,

Debtor, Frederick S. WYLE,
Trustee in Bankruptcy of
Hamilton Taft & Co.,

Plaintiff-Appellant

v.

S & S CREDIT CO.,

Defendant-Appellee.

MOTION TO RECALL MANDATE

Movant Connie C. Armstrong, Jr. respectfully requests that

this Court recall its mandate issued on October 12, 1995. On

that date, this Court dismissed a pending en bane appeal due to

mootness by reason of settlement and then vacated the panel

decision appearing at 53 F.3d 285. For the reasons that follow,

vacatur was not appropriate, and Armstrong seeks the remedy of a

recalled mandate to prevent injustice.

1. The instant civil litigation parallels criminal

litigation originating in the same district court and reviewed.

by this Circuit. Specifically, the criminal litigation was

addressed by this Court in United States of America v. Connie C.

Motion to Recall Mandate Page 1

Armstrong, ~r., 216 F.3d 1084, No. 97-10392, WL 425007 (9th Cir.

2000) (Table Opinion). In that criminal appeal of a fraud

conviction arising from his ownership of Hamilton Taft,

Armstrong challenged the district court's refusal to give a

theory-of-the-defense instruction. Armstrong pointed to this

Court's opinion in In re Hamilton Taft & Co., 53 F.3d 285 (9th

Cir. 1995) and requested that the district court instruct the

jury in accordance with that opinion. To counter arguments by

the government during the criminal trial concerning breach of

trust, Armstrong wanted the jury informed that ~ . . under

ordinary principles of trust, Taft did not hold the funds in

trust. Thus, the funds were property of [Taft] 1/ Id. at

288. The requested ,instruction was pivotal as it underscored

Armstrong's legal authority to invest the subject monies for his

own account. In reliance on this Court's improper vacatur of

its opinion in In re Hamilton Taft, the district court refused

the instruction.

2. This Court upheld the district court's refusal. In

doing so, this Court also relied upon the vacatur of In re

Hamilton Taft & Co. as the basis for affirming the district

court. ~We reject Armstrong's assertion that this Court's

decision in In re Hamilton Taft & Co., 53 F.3d 285 (9th

Cir.1995), opinion vacated, 68 F.3d 337 (9th Cir.1995), required

Motion to Recall Mandate Page 2

the district court to use his proposed instruction. In re

Hamilton Taft has been vacated as moot, and thus is no longer

binding precedent."1 U.S. v. Armstrong at *1. Because the

vacatur challenged in this instant motion is both intertwined

with and materially impacting the review of Armstrong's criminal

conviction, Armstrong asserts the vacatur actually invades a

concrete and particularized legal interest, thereby giving him

standing to challenge the vacatur. See Lujan v. Defenders of

Wildlife, 504 U.S. 555 1 560 (1992). He has a "direct stake in

the outcome." Diamond v. Charles, 476 U.S. 54 1 56 (1986)

3. Armstrong is still incarcerated from the convictions

challenged in his ongoing criminal appeal. On May 28, 2002,

Armstrong filed a PETITION FOR PANEL REHEARING WITH SUGGESTION

FOR REHEARING EN BANC of the panel opinion released as U.S. v.

Armstrong, No. 00-10399, WL 554373 (9th Cir. Apr 15, 2002).

This Court has not released its response to Armstrong's

Petition. For these reasons, this motion concerns an actual

I The quoted passage continues as follows:

"Furthermore, its holding--that Hamilton Taft does not hold
client funds in trust for the IRS--is inapplicable to the issue
of what obligations existed between the company and its
clients." U.S. v. Armstrong at *1 (emphasis in original). Thi p
statement contradicts the clear language of the opinion, which
held that the subject funds were the property of Hamilton Taft.
Contractual obligations were of no moment in either the civil or
the criminal litigation.

Motion to Recall Mandate Page 3

case or controversy under Article III of the United States-

Constitution.

4. This Court held in Zipfel v. Halliburton Co., 861 F.2d

565 (9th Cir.), that "the authority of a Court of Appeals to

recall its mandate is clear. While the authority is not

conferred by statute, it exists as part of the court's power to

protect the integrity of its own processes." Id. at 567

(citations omitted). The decision whether to exercise the power

"falls within the discretion of the court, but such discretion

should be employed to recall a mandate only when good cause or

unusual circumstances exist sufficient to justify modification

or recall of a prior judgment." rd. As a general rule, this

Court will recall a mandate only when animated by "an

overpowering sense of fairness and a firm belief that this is

the exceptional case requiring recall of the mandate in order to

prevent an injustice. 1f
Verrilli v. City of Concord, 557 F.2d

664, 665 (9th Cir. 1977) i see also Zipfel, 861 F.2d at 567.

Specifically, this Court has recalled its mandate when a

"decision of the Supreme Court \departs in some pivotal aspects'

from a decision of lf
this court. Zipfel, 861 F.2d at 567 (quoting

American Iron and Steel lnst. v. EPA, 560 F.2d 589, 596 (3d Cir.

1977) I cert. denied, 435 U.S. 914 (1978)). This is the

situation in the case at bar.

Motion to Recall Mandate Page 4

 5. The mandate for which recall is sought reads, in its

entirety, as follows: "The Court is advised that the case has

been settled. Accordingly, the appeal is dismissed as moot and

the decision filed May 2, 1995, appearing at 53 F.3d 285, is

vacated." In re Hamilton Taft & Co., 68 F.3d 337, 337 (9th Cir.

1995). As discussed below, automatic vacatur of an appeal

mooted by settlement is not authorized by the Supreme Court.

Moreover, 'this case presents a uniquely harmful twist. Unlike

the typical situation where a district-court ruling is under

review by a panel, the parties settle, and the inquiry then

becomes whether or not to vacate the district court ruling,

here, the panel had already released an opinion reversing the

lower court. By vacating the panel opinion, this Court has let

stand a district court opinion that was held erroneous following

de novo appellate review.

6. The u.s. Supreme Court has spoken on this issue and has
instructed that "mootness by reason of settlement does not

justify vacatur of a judgment under review." u.s. Bancorp v.

Bonner Mall, 513 U.S. 18, 29 (1994). This Court has interpreted

Bonner Mall to hold that when the mootness is caused by actions

of the parties, rather than happenstance, automatic vacatur is

not appropriate. See American Garnes Inc. v. Trade Prod., 142

F.3d 1164, 1169 (9th Cir. 1998); Mayfield v. Dalton, 109 F.3d

Motion to Recall Mandate Page 5

1423, 1427 (9th Cir. 1997); Cammermeyer v. Perry, 97 F.3d 1235,

1239 (9th Cir. 1996). Despite the Supreme Court's clear

instructions, this Court nonetheless automatically vacated an

opinion under review when that opinion was mooted by settlement

between the parties.

7. Such vacatur was not lawful and has had a direct and

adverse impact on the review of Armstrong's criminal conviction.

ACCORDINGLY, Armstrong requests that this Court recall the

mandate issued on October 12, 1995 and thereby reinstate its

opinion in In re Hamilton Taft. Armstrong further requests that

this Court, in the interest of justice, ameliorate the harm

caused by the improper vacatur by recalling its opinion in U.S.

v. Armstrong,2 which opinion relied upon the improper vacatur,

and remand that criminal case for a new trial.

Respectfully submitted,

Connie C. Armstrong r Jr.

Reg. No. 88762-011 r Unit B-5
Federal Correction Institution
P.O. Box 9000
Seagoville r Texas 75159-9000

2 216 F.3d 1084, No. 97-10392, WL 425007 (9th Cir.

2000) (Table Opinion) .

Motion to Recall Mandate Page 6