                                                                                                                           Opinions of the United
1999 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


4-8-1999

USA v. Dispoz O Plastics
Precedential or Non-Precedential:

Docket 98-1135,98-1136




Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1999

Recommended Citation
"USA v. Dispoz O Plastics" (1999). 1999 Decisions. Paper 92.
http://digitalcommons.law.villanova.edu/thirdcircuit_1999/92


This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 1999 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
Filed April 8, 1999

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

Nos. 98-1135 and 98-1136

UNITED STATES OF AMERICA

v.

DISPOZ-O-PLASTICS, INC.,

       Appellant in No. 98-1135

and

PETER IACOVELLI,

       Appellant in No. 98-1136

On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Criminal Action Nos. 96-cr-00280-2 and 4)
District Judge: Honorable Anita B. Brody

Argued September 14, 1998

Before: STAPLETON and ROTH, Circuit Judges
LONGOBARDI,1 District Judge

(Opinion filed: April 8, 1999)



_________________________________________________________________
1. Honorable Joseph J. Longobardi, United States District Court Judge
for the District of Delaware, sitting by designation.
       Joel I. Klein
       Assistant Attorney General
       A. Douglas Melamed
       Deputy Assistant Attorney General
       John J. Powers, III, Esq.
       Robert B. Nicholson, Esq.
       John P. Fonte, Esq. (Argued)
       Antitrust Division
       U.S. Department of Justice
       601 D. Street, N.W.
       Washington, D.C. 20530

       Scott D. Hammond, Esq.
       Antitrust Division
       U.S. Department of Justice
       950 Pennsylvania Avenue, N.W.
       Washington, D.C. 20530

        Attorneys for Appellee

       Theodore B. Olson, Esq. (Argued)
       Miguel A. Estrada, Esq.
       Jacqueline E. Coleman, Esq.
       Gibson, Dunn & Crutcher LLP
       1050 Connecticut Avenue, N.W.
       Washington, D.C. 20036-5306

        Attorneys for Appellants

OPINION OF THE COURT

ROTH, Circuit Judge.

Peter Iacovelli and his company, Dispoz-O-Plastics, Inc.
("Dispoz-O"), appeal from a judgment of conviction entered
in the United States District Court for the Eastern District
of Pennsylvania. Iacovelli and Dispoz-O were convicted of
conspiracy to fix prices in the plastic cutlery industry in
violation of 15 U.S.C. S 1. Their claims on appeal include
the following: (1) that the District Court erred in admitting
evidence that government witnesses had been convicted of

                                 2
conspiracy to fix prices with Dispoz-O, (2) that the District
Court erred in determining that the government's vouching
for its witnesses by referring to extra-record prosecutorial
policy constituted harmless error, and (3) that the District
Court failed to declare a mistrial on the grounds that the
government vouched for its witnesses by saying they had
no motive to lie about whether they conspired tofix prices.2
We will affirm the judgment of the District Court regarding
appellants' first and third claims, the admissibility of the
co-conspirators' convictions and the prosecutor's comments
regarding the government's witnesses' motives to lie.
However, we find that the prosecutor's extra-record
comment about prosecutorial policy constitutes reversible
error. We will therefore reverse the judgment of the District
Court and remand this case for a new trial.

I. FACTS

Dispoz-O is an American manufacturer of disposable
plastic cutlery, including knives, forks, and spoons. Peter
Iacovelli is Dispoz-O's president, CEO, and sole
stockholder. One type of plastic cutlery that Dispoz-O
manufactures is medium-weight polypropylene cutlery, a
popular flexible type of cutlery that is less expensive than
stiffer polystyrene cutlery. Two of Dispoz-O's competitors in
the medium-weight polypropylene cutlery ("plastic cutlery")
industry are Amcel Corp. ("Amcel"), headed by Lloyd Gordon,3
and Polar Plastics Manufacturing, Ltd. ("Polar"), headed by
Andrew Liebmann and Basem Atallah.
_________________________________________________________________

2. We have considered the remaining contentions raised by Iacovelli and
Dispoz-O and conclude that the District Court's treatment of them did
not amount to reversible error. These remaining claims are that the
government used first-person pronouns in its opening and closing
statements to describe itself as a protagonist in the investigative
process
and to present its beliefs and conclusions to the jury, and that in its
closing statement the government impermissibly commented on
Iacovelli's failure to testify and it referred to FBI equipment used to
investigate telephone numbers that was not introduced at trial.

3. Iacovelli and Dispoz-O were tried jointly with co-defendants Amcel and
Lloyd. All defendants were convicted of conspiracy to fix prices. Only
Iacovelli and Dispoz-O appeal.

                               3
Dispoz-O, Iacovelli, Amcel, and Gordon were charged with
conspiracy to fix prices in the plastic cutlery industry. The
charges centered on a meeting held at a restaurant at
LaGuardia Airport in November 1991. Prior to the meeting,
in October 1990 and May 1991, Gordon had sent copies of
Amcel's recent price increases to Dispoz-O and Polar. In
October 1991, Gordon met privately at a trade show with
Liebmann and Atallah and later with Iacovelli and Albert
Postrel, Dispoz-O's sales representative, to convince them to
follow each other in making price increases. At that time,
Iacovelli requested a meeting with representatives of Amcel
and Polar to discuss pricing. He also contacted Michael
Kennedy, head of the parent corporation of another plastic
cutlery competitor, Winkler Products, to discuss"get[ting] a
price increase." Kennedy declined to discuss pricing with
Iacovelli.

The meeting at LaGuardia Airport was attended by
Gordon, Iacovelli, Liebmann, and Atallah. According to the
testimony of Liebmann and Atallah, Iacovelli outlined then-
existing costs, and the group agreed that prices were too
low. Atallah suggested that the group set a price minimum
under which they would not go in order to prevent
customers from playing the manufacturers against each
other. Price increases in the industry were usually set as
percentages because customers had varying deals with the
manufacturers and often received prices that were
discounted from standard price ranges. However, the
LaGuardia group agreed to fix truckload prices at specific
levels: $4.75 per case for forks, spoons, and knives, $5.00
for soup spoons, and $5.25 for combination fork/spoon
("spork") cutlery; they resolved not to offer discounts below
those levels.

Atallah said that another competitor, Jet Plastica, should
be asked to join the agreement if it was to be successful.
Gordon agreed to approach Jet Plastica's principal about
the plan. Atallah volunteered to increase its pricesfirst and
then send copies of its letter notifying customers of the
price increases to Gordon and Iacovelli. During the meeting,
Iacovelli told Liebmann and Atallah to refrain from taking
notes and to pay for meeting expenses with cash to avoid
creating any record of the meeting.

                               4
After the meeting, Atallah drafted the letter and an
explanatory memo for his sales force. He instructed his
secretary that, before she disseminated the letter to
customers, she should fax copies of the letter to Amcel and
Dispoz-O without the "Polar" fax banner. A few days later,
Gordon faxed a signed price letter with identical increases
to Polar and Dispoz-O; although sent by Gordon, these
faxes bore the fax banner of an unrelated company, M.B.
Financial. Later that day, Dispoz-O issued an increase
letter listing the same prices. Unlike Amcel's and Polar's
letters, however, Dispoz-O's letter did not announce the
prices as a "floor" below which no discounts would be
granted. Moreover, Dispoz-O did not adhere to such a
"floor" after its letter was sent out; in fact, it did still
discount or rebate some of its sales, although not as
extensively as before.

Iacovelli set the price increases without Postrel's
customary input. He assured Postrel that the increase
would "stick," as Gordon also assured one of his sales
managers. The price increases "stuck" from January 1992
to early March 1992, when Atallah notified Iacovelli and
Gordon that he was going to lower Polar's prices. Although
Iacovelli and Gordon tried to dissuade him, Atallah refused
to continue with the agreement because he claimed to be
losing too much business to Jet Plastica, which had not
joined the agreement.

Later, the FBI questioned Iacovelli and Gordon, who lied
about their contacts with competitors. Iacovelli denied that
he had ever discussed prices with competitors, either in
meetings or on the telephone, and he claimed that he had
never received pricing information from a competitor by fax.
Subsequently, Gordon contacted Iacovelli and Atallah to
arrange a cover-up.

The government indicted Dispoz-O, Iacovelli, Amcel, and
Gordon for conspiracy to fix prices. At trial, the
government's two main witnesses were Liebmann and
Atallah. These two had previously pled guilty to conspiracy
to fix prices in the plastic cutlery industry and to an
unrelated conspiracy to fix prices in the plastic cups
industry. The testimony of Liebmann and Atallah was
crucial to the government's case because the primary issue

                               5
at trial was whether Liebmann, Atallah, Gordon, and
Iacovelli had reached an agreement to fix prices. The
government's documentary evidence revealed only general
information such as the timing and frequency of telephone
calls among the parties and the fact that the parties had
faxed their price letters to each other. Liebmann and
Atallah's testimony was necessary to establish the subject
matter of the discussion at LaGuardia, as well as of the
other communications between the parties, and thereby to
demonstrate that the competitors were conspiring tofix
prices.

The theory of the defense was that the LaGuardia
meeting and the other communications related to merger
and joint-venture discussions rather than to illegal price-
fixing. The defense presented evidence of merger and joint-
venture discussions between industry manufacturers
during that time, as well as introducing planning
documents which analyzed Dispoz-O as a potential partner
for Amcel. The defense also produced evidence that
communications between manufacturers about their pricing
was advisable, given customers' attempts to play the
manufacturers against each other. Because the topic of
conversation at the LaGuardia meeting was so vital to both
sides, the credibility of Liebmann and Atallah was key.

At the close of the trial, the prosecutor argued during
summation:

       Now, first with regard to the sweetheart deal. You
       heard the testimony of Liebmann and Atallah, you can
       decide whether or not you think they felt that was a
       sweetheart deal. They went to jail and they pled guilty
       to both counts.

        Common sense tells you people don't confess to a
       crime, they don't turn a completely innocent, legitimate
       business meeting into a crime, they don't confess to
       crimes they didn't commit and that's what the
       defendants are trying to tell you they did.

        Now obviously   they got credit for their cooperation;
       that's the way   it works. But that misses the point. Why
       would Liebmann   and Atallah say they fixed prices at
       LaGuardia? Why   would they tell that to the

                                 6
       Government, who would they tell that to the judge who
       sentenced them? Why would they tell that to their
       customers, their customers, if it didn't happen? Think
       about that.

        They told the Government they fixed prices twice and
       I can guarantee you the Justice Department doesn't
       give two for one deals; they had to plead guilty to both
       price fixing conspiracies and their sentence reflected
       that.

On the basis of these remarks, the defendants moved for
a mistrial. The court held a hearing and issued an opinion
denying defendants' motion. The court determined that the
prosecutor's reference to the guilty pleas of Liebmann and
Atallah was made in response to defendants' argument that
the witnesses' guilty pleas provided a motive for them to lie.
The court gave two curative instructions to the jury,
explaining how the pleas could and could not be used.

In its post-trial Order and Explanation, the District Court
concluded that, even if the prosecutor's comments had
been improper, they constituted harmless error because of
the overwhelming evidence of defendants' guilt. The court
further found that the prosecutor's comment that the
witnesses were sentenced for "two price fixing conspiracies"
was not extra-record vouching because of testimony at trial
that the witnesses had pled guilty and were sentenced for
two crimes. The court also found the prosecutor's reference
to a purported government policy against offering"two-for-
one" deals to constitute vouching. However, it deemed the
"conspiracies" and "two-for-one" comments to be harmless
error in light of the context of the trial and the
overwhelming evidence against defendants.

The District Court had jurisdiction over this action
pursuant to 18 U.S.C. S 3231 and 15 U.S.C.S 1. See United
States v. Gaev, 24 F.3d 473, 474 n.1 (3d Cir. 1994).
Dispoz-O filed a timely appeal. We have jurisdiction
pursuant to 28 U.S.C. S 1291.

                               7
II. DISCUSSION

A. The Guilty Pleas

The first issue we will consider is whether the District
Court erred in admitting the co-conspirators' guilty pleas.
The government contends that Dispoz-O and Iacovelli
waived their objections to the admissibility of the pleas.

Our standard of review of a trial court's decision to admit
evidence of a co-conspirator's convictions is for abuse of
discretion. United States v. Universal Rehabilitation
Services, No. 97-1412, 1999 WL 62512, at *9 (3d Cir. Feb.
11, 1999); Gaev, 24 F.3d at 476; Bruno v. W.B. Saunders
Co., 882 F.2d 760, 766 (3d Cir. 1989).

Dispoz-O and Iacovelli moved in limine to exclude
evidence of the guilty pleas as unduly prejudicial, arguing
that the crime necessarily involved more than one
participant and that the defendants and the witnesses had
been charged with the same conspiracy.4 The government
countered that the cutlery plea evidence should be
admitted to explain the witnesses' motivation to testify and
the circumstances surrounding their appearances in court.
Defense counsel offered not to attack the witnesses'
credibility on the claim that Liebmann and Atallah were
given leniency by being allowed to avoid charges on the
cutlery conspiracy. Counsel further offered not to argue to
the jury that the witnesses got a "sweetheart deal because
the Government let them slide on cutlery." The government
countered that the jury would nevertheless be left with the
misleading impression that the witnesses received leniency
on the cutlery charge. The court asked defense counsel if
he would be willing to avoid admission of evidence of both
the cups and cutlery pleas. He answered, "That's not going
to happen, judge."

Regarding the cutlery pleas, defense counsel conceded,
"[T]his whole problem is because it's a conspiracy. If it
wasn't a conspiracy, it wouldn't be a problem. If there was
_________________________________________________________________

4. In their pre-trial brief, defendants specifically noted that they did
not
object to the introduction of the witnesses' guilty pleas to conspiracy in
the plastic cups industry.

                               8
a substantive offense of price fixing and these guys pled
guilty to price fixing, I wouldn't care about it, but it's
because it takes two to tango, and there's them and there's
us." The judge asked, "Could we carve something out that
would deal with this somewhat, to say instead of that they
pled guilty to conspiracy, that they pled guilty to price
fixing in these two areas?" Defense counsel replied, "That
would be very helpful. That would deal with a major
problem." Noting that removal of the word "conspiracy"
from the price-fixing pleas sounded "reasonable," the judge
nevertheless stated, "I'm not ruling on that." The judge
again asked defense counsel if removal of "conspiracy"
would suffice: "That will be eliminated. All right. The
present status of that, does that have you satisfied . . .?"
Counsel replied, "It does, yes."

The plea agreements were then redacted to eliminate the
term "conspiracy" and read simply that Liebmann and
Atallah would plead guilty to fixing the price of plastic
cutlery and cups. The redacted plea agreements were
admitted into evidence without objection. Although the
court's subsequent written order stated that the motion in
limine was granted in part and denied in part, the order
also stated that the disposition of the motion was"as stated
on the record of July 3, 1997."

Defense counsel in fact did use the term "conspiracy" on
several occasions during his cross-examination of
Liebmann and Atallah. Then, at the outset of his closing
argument, the prosecutor for the first time used the word
"conspiracy," stating that Liebmann and Atallah had pled
guilty "to both price fixing conspiracies." When the
argument was completed and the jury had left the
courtroom, defense counsel moved for a mistrial, asserting
that the court had "ruled out" admission of evidence
regarding pleading guilty to two conspiracies. The judge
replied, "I didn't rule it out, it's what you both agreed to."
Defense counsel acknowledged, "Yes."

A waiver is the "intentional relinquishment or
abandonment of a known right." United States v. Olano,
507 U.S. 725, 733, 113 S.Ct. 1770, 123 L.Ed.2d 508
(1993); see United States v. Goldberg, 67 F.3d 1092, 1099
(3d Cir. 1995), quoting Johnson v. Zerbst, 304 U.S. 458,

                               9
464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). Once waived, a
claim is not preserved for appellate review. See Olano, 507
U.S. at 733-734; United States v. Yu-Leung, 51 F.3d 1116,
1120 (2d Cir. 1995), aff 'd sub nom. Ruotolo v. United
States, 133 F.3d 907 (2d Cir.), cert. denied , 118 S.Ct. 1852,
140 L.Ed.2d 1101 (1998); see also United States v. Lakich,
23 F.3d 1203, 1207 (7th Cir. 1994) (relying on Olano);
United States v. Gomez, 67 F.3d 1515, 1520 (10th Cir.
1995) (citing Olano and Lakich). Where a claim has not
been definitively ruled upon, a moving party must object
during trial to preserve that claim for appellate review.
Bruno, 882 F.2d at 767-68; accord Walden v. Georgia-Pacific
Corp., 126 F.3d 506, 517-19 (3d Cir. 1997); cert. denied,
118 S.Ct. 1516, 140 L.Ed.2d 669 (1998); American Home
Assurance Co. v. Sunshine Supermarket, Inc., 753 F.2d 321,
324-25 (3d Cir. 1985).

At trial, when the government presented the redacted
guilty pleas, Iacovelli and Dispoz-O did not object. Under
the facts as presented, we conclude that no definitive
pretrial ruling was made on the admissibility of the pleas
and that the failure of defense counsel to object to their
admission resulted in a waiver of the issue. To the extent
that defense counsel objected to the one-time use of the
term "conspiracy" by the prosecutor during his summation,
that one objection does not appear to be directed at the
admission into evidence of the redacted plea agreements.
Moreover, the next morning the court gave a curative
instruction to explain to the jury the purpose for which the
pleas could be considered:

       [B]y stipulation of the parties it was agreed before the
       trial that Andrew Liebmann and Basem Atallah had
       pled guilty to fixing prices of plastic cutlery and not to
       a conspiracy to fix prices. As I will instruct you later in
       the charge, you are not to draw an inference of the
       guilt of any of the defendants in this case from the fact
       that other people have pled guilty to similar charges.

In this appeal, Iacovelli and Dispoz-O, in their opening
brief, set out in the Statement of Issues as thefirst one:
"Whether reversal of appellants' convictions is required
because the district court erroneously admitted evidence
that other individuals already had been convicted as a

                               10
result of the events for which appellants were on trial?" The
appellants then stated that this issue "was raised before
trial by motion in limine, (JA 30), and was argued and
ruled upon at a conference held on July 3, 1997, just
before the trial began." Iacovelli and Dispoz-O are bound by
this description of the issue. Consequently, we conclude
that the issue of the admissibility of the convictions and of
the pleas leading to them was not preserved for appellate
review.

B. Vouching

Dispoz-O's next claim is that the prosecutor vouched for
Liebmann and Atallah during closing argument and that
the district court erred in not granting a mistrial. We
"review a district court's decision not to grant a mistrial on
the grounds that the prosecutor made improper remarks in
closing argument for abuse of discretion." United States v.
Molina-Guevara, 96 F.3d 698, 703 (3d Cir. 1996).

There are two instances of vouching in the prosecutor's
closing statement. The one we will review first is the
prosecutors' comment on a purported plea policy of the
Department of Justice. We find it to have been improper,
and, because we find it was not harmless error, it warrants
reversal. We conclude, however, that the second set of
remarks, which addressed the witnesses' testimony about
the LaGuardia meeting, was within the permissible bounds
of advocacy.

"Vouching constitutes an assurance by the prosecuting
attorney of the credibility of a Government witness through
personal knowledge or by other information outside of the
testimony before the jury." United States v. Walker, 155
F.3d 180, 184 (3d Cir. 1998). Vouching is distinguishable
from a personal opinion based on the evidence presented at
the trial. United States v. DiLoreto, 888 F.2d 996, 999 (3d
Cir. 1989), overruled on other grounds, United States v.
Zehrbach, 47 F.3d 1252 (3d Cir. 1995) (en banc).

A prosecutor may not try to buttress his case by
vouching for the credibility of a government witness.
Molina-Guevara, 96 F.3d at 704. As we noted in Molina-
Guevara, the Supreme Court discussed the dangers of

                               11
vouching in United States v. Young, 470 U.S. 1, 18-19, 15
S.Ct. 1038, 84 L.Ed.2d 1 (1985). The Court stated the
following:
 843<!>The prosecutor's vouching for the credibility of

       witnesses and expressing his personal opinion
       concerning the guilt of the accused pose two dangers:
       such comments can convey the impression that
       evidence not presented to the jury, but known to the
       prosecutor, supports the charges against the defendant
       and can thus jeopardize the defendant's right to be
       tried solely on the basis of the evidence presented to
       the jury; and the prosecutor's opinion carries with it
       the imprimatur of the Government and may induce the
       jury to trust the Government's judgment rather than
       its own view of the evidence.

Id.

During the closing, the prosecutor commented on a
purported policy of the Department of Justice. The
prosecutor stated, "They told the Government they fixed
prices twice and I can guarantee you the Justice
Department doesn't give two for one deals; they had to
plead guilty to both price-fixing conspiracies and their
sentence reflected that."5

We ruled that comments similar to that of the prosecutor
here were improper vouching in United States v. DiLoreto,
888 F.2d 996 (3d Cir. 1989), a case involving conspiracy to
distribute narcotics. The government witnesses were drug
dealers who had entered into plea bargains. The defense
attorneys strongly attacked the credibility and bias of the
witnesses by arguing that the witnesses were testifying only
because of "their own benefits, by their own interests, by
their own motives" relating to their deals with the
government. Id. at 998. During closing rebuttal, the
prosecutor stated in part:
_________________________________________________________________

5. As discussed above, we conclude that Iacovelli and Dispoz-O waived
their objections to the admission of evidence of the witnesses' guilty
pleas. For that reason, the discussion in this section concerns only the
reference in the government's remarks to the plea bargain policy of the
Department of Justice.

                               12
       And you also heard that they have a plea bargain, and
       you heard what happened when that plea bargain is
       not fulfilled. If they lie, that bargain is off. That's it, no
       bargain. We don't take liars. We don't put liars on the
       stand. We don't do that.

Id. (emphasis added).

On appeal, we reversed,6 stating:

       By this language in his closing rebuttal statement, the
       prosecutor asserted to the jury that the government
       does not use liars as witnesses in its cases. . . . No
       explanation was given, however, of how the government
       ascertains the honesty or veracity of its witnesses.
       Indeed, we have found nothing in the record upon
       which the prosecutor could have grounded his
       statement. There must then have been some other
       evidence, unknown or unavailable to the jury, which
       convinced the prosecutor that his witnesses were not
       liars. Obviously, the defendants were not confronted
       with this extraneous evidence and afforded cross-
       examination, nor was the jury given an opportunity to
       engage in its own evaluation. What the jury was led to
       do instead was merely to infer that other information
       existed, which the government used to verify the
       credibility of its witnesses prior to introducing their
       testimonies at trial.

Id. at 999.

Here, the prosecutor similarly tried to buttress the
credibility of cooperating witnesses by providing extra-
record information. His remark about the purported policy
of the Department of Justice not to give "two-for-one deals"
was meant to convince the jury that the prosecutor knew
that the witnesses were telling the truth -- that the
department would not give a deal in return for the two
guilty pleas unless it was convinced that there were two
_________________________________________________________________

6. In DiLoreto, we used a per se rule to determine whether reversal was
required. 888 F.2d at 999. We overruled DiLoreto 's per se rule in our en
banc decision in United States v. Zehrbach, 47 F.3d 1252, 1267 (3d Cir.
1995). However, we did not overrule the result reached in DiLoreto,
reversing the convictions. Zehrbach, 47 F.3d at 1255 n.1.

                               13
price fixing offenses and that Liebmann and Atallah were
criminally involved in both of them. The jury was led to
infer that the government had information with which they
were able to confirm that Liebmann and Atallah were
truthful in their recitations of their involvement and also
that of the other "conspirators," i.e., Iacovelli, Dispoz-O,
Gordon, and Amcel. The inference was, therefore, that the
department had verified the existence of both conspiracies,
but there was no explanation of how the department had
made this verification.7 Without such an explanation,
Iacovelli and Dispoz-O were deprived of the chance to cross-
examine. Moreover, the jury may have been persuaded by
this language to find that the witnesses' statements
implicating Iacovelli and Dispoz-O were accurate and, thus,
that Iacovelli and Dispoz-O were guilty. See DiLoreto, 888
F.2d at 1000. For this reason, the prosecutor's extra-record
remark constituted vouching.

Even if a prosecutor is found to have vouched for a
government witness, however, the government may
defensively invoke the "invited response" doctrine in an
_________________________________________________________________

7. Judge Stapleton considers it unlikely that a juror would infer from the
government's reference to a policy against two-for-one deals that the
Justice Department "had verified the existence of both conspiracies." He
nevertheless concludes that this reference provides impermissible
support for the veracity of Liebmann and Atallah and that this
prosecutorial misconduct was not harmless.

In Judge Stapleton's view the defense properly argued to the jury that
Liebmann and Atallah decided to perjure themselves about (and plead
guilty to) a non-existent plastic cutlery conspiracy because they expected
that, as a result of doing so, they would receive less punishment than
they would receive if they confessed only to the plastic cup conspiracy
(i.e., a sweetheart deal). The prosecutor's reference to a policy against
two-for-one deals was tendered in an attempt to counter this argument.
This reference was intended to suggest that, when Liebmann and Atallah
confessed to the FBI participation in a second conspiracy, they were
speaking against their own interests because they knew that, under
Justice Department policy, a second confession would necessarily lead to
a second indictment and two sentences based on the two crimes. There
was no record evidence, however, from which a juror could conclude that
a policy against two-for-one deals existed, or, accordingly, that it
played
a role in the decisions of Liebmann and Atallah to confess to the second
conspiracy.

                               14
attempt to prevent reversal. The invited response doctrine
covers comments made in "reasonable response to improper
attacks by defense counsel." Walker, 155 F.3d at 186 n.5,
quoting United States v. Pungitore, 910 F.2d 1084, 1126 (3d
Cir. 1990); United States v. Pelullo, 964 F.2d 193, 218 (3d
Cir. 1992). The doctrine's rationale is that "the unfair
prejudice flowing from the two arguments may balance
each other out, thus obviating the need for a new trial."
Walker, 155 F.3d at 186 n.5 (quoting Pungitore, 910 F.2d at
1126). A prosecutor may use the doctrine defensively, but
not offensively, as a "springboard" launching affirmative
attacks upon defendants. Id.; Pelullo , 964 F.2d at 218.

The government claims that its "guarantee" was in proper
response to specific comments of defense counsel in
opening and closing arguments about the "sweetheart deal"
that the witnesses landed in the plastic cups case by
inventing the price fixing in cutlery. Defense counsel
asserted that, in order to get shorter sentences than the
ones they were already facing for the plastic cups
conspiracy, Liebmann and Atallah lied by telling the
government that defendants were involved in a cutlery
conspiracy. Counsel did not accuse the prosecution of
participating in the alleged lie. Rather, defense counsel
asserted that the witnesses confirmed the suspicions which
the prosecution had about price fixing of cutlery, based on
the fact that telephone calls had been made and that the
meeting at LaGuardia had been held. Referring to the
witnesses' alleged fabrications, counsel stated,"Does that
mean that these prosecutors are coming in here and selling
a lie? No, it doesn't."

Unless the defense had made direct attacks on the
prosecution or on other law enforcement officials, we
cannot say that the prosecutor's comment about the
Justice Department's purported plea bargaining policy was
permissible under the invited response doctrine. We have
generally found the invited response doctrine to be
applicable only in instances where the prosecution team
was attacked for reasons unsupported by the evidence at
trial. See United States v. Gambino, 926 F.2d 1355, 1364-
66 (3d Cir. 1991) (comments including assertion that
government suborned perjury); United States v. Pungitore,

                               15
910 F.2d 1084, 1127 (3d Cir. 1990) (personal attacks on
integrity of prosecutors and law enforcement officers); see
also Pelullo, 964 F.2d at 217-18 (comment that government
suborned perjury); United States v. Curtis, 683 F.2d 769,
778 (3d Cir. 1982) (comment that government avoided
questioning witness about entrapment allegations); cf.
Young, 470 U.S. at 9 ("Defense counsel, like his adversary,
must not be permitted to make unfounded and
inflammatory attacks on the opposing advocate.").8

Moreover, we have distinguished between an attack on
the testimony given by a government agent and a situation
where the prosecution is accused of putting on a case
which it knew was false. In the former situation, we found
the invited response doctrine to be inapplicable. See Molina-
Guevara, 96 F.3d at 705. In Molina-Guevara , defense
counsel attacked the credibility of a government agent who
testified. The defense urged the jury to consider that the
agent -- whose "frustrating" job it was to catch criminals
who sometimes "g[o]t away" -- was"human" and may have
"erred," "stretched," or even "lied" when testifying about the
drug bust at issue. Id. at 701-02. In turn, the prosecutor
vouched for the agent by saying that it would be"insulting"
and "ridiculous" for the jury to assume that the United
States would present a witness who would lie and that the
agent "did not lie to you." Id. at 704.9 We determined that
the government's statements were not excused under the
invited response doctrine because defense counsel's
comments fell within the bounds of "vigorous advocacy
entirely appropriate for a case that turned on the jury's
assessment of the credibility of the witnesses." Id. at 705.
_________________________________________________________________

8. The government cites the Second Circuit's decision in United States v.
Eltayib, 88 F.3d 157, 173 (2d Cir. 1996) to support its argument that it
properly responded to defense counsel's attacks that"impugned the
integrity of [its] case." Unlike the instant case, however, the defense in
Eltayib directly attacked the prosecution, asserting that it had
fabricated
an informant's testimony. Id.

9. The prosecution also argued that another agent, if called as a witness,
would have corroborated the testifying agent's story. The case was
reversed because we found that comment to be violative of the
Confrontation Clause of the Sixth Amendment. Molina-Guevara, 96 F.3d
at 702-03.

                               16
Here, defense counsel did not directly attack the
 538<!>prosecution. Although defense counsel attacked the

witnesses' credibility based on their possible motivation to
plead guilty and to testify, defense counsel did not suggest,
for instance, that the prosecutor was suborning perjury.
Consequently, the prosecution's comment did not qualify as
an invited response.

Because we find that the invited response doctrine is not
applicable, we must next evaluate the vouching to
determine whether it constituted harmless error. Zehrbach,
47 F.3d at 1264. This Court en banc has held that
vouching that is aimed at the witness's credibility and is
based on extra-record evidence is deemed non-
constitutional error. Id. at 1265.10

Non-constitutional error is considered harmless when"it
is highly probable that the error did not contribute to the
_________________________________________________________________

10. Iacovelli and Dispoz-O cite a recent Supreme Court case, Gray v.
Maryland, 523 U.S. 185, 118 S.Ct. 1151, 140 L.Ed.2d 294 (1998), to
support their proposition that the prosecutor's vouching here is
constitutional error, violating the Sixth Amendment. They claim that
Gray overruled Zehrbach. However, the language in Gray does not extend
to prosecutorial vouching. In Gray, the Supreme Court extended its
ruling in Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20
L.Ed.2d 476 (1968). Bruton was found guilty after the confession of a
non-testifying co-defendant was admitted at a joint trial. Because the
confession named and incriminated Bruton, the Court found that its
admission violated Bruton's Sixth Amendment rights despite a limiting
instruction to the jury that the confession should only be considered as
evidence against the defendant who had confessed. Gray extended that
protection to a defendant faced with the admission of such a confession
by a codefendant when the confession was redacted by substituting a
blank space or the word "deleted" for the defendant's name. Gray, 118
S.Ct. at 1153. The decision in Gray focuses on "powerfully incriminating
extrajudicial statements of a codefendant," id. at 1155 (quoting
Richardson v. Marsh, 481 U.S. 200, 207 (1987)), which are "so
prejudicial that limiting instructions cannot work." Id. Vouching, as a
category of statements, does not necessarily rise to the same level of
prejudice as does the type of redacted confession involved in Gray. In
many instances of vouching, curative instructions do indeed neutralize
the improper statement. See, e.g., Zehrbach, 47 F.3d at 1267. We
conclude that our determination that vouching is non-constitutional
error does not run afoul of Gray.

                                17
judgment." Id., quoting Government of Virgin Islands v. Toto,
529 F.2d 278, 284 (3d Cir. 1976). "High probability" is
found where the court has a "sure conviction that the error
did not prejudice" the defendant. Zehrbach , 47 F.3d at
1265, quoting United States v. Jannoti, 729 F.2d 213, 219-
20 (3d Cir.), cert. denied, 469 U.S. 880, 105 S.Ct. 243, 244,
83 L.Ed.2d 182 (1984). The test for determining prejudice
is tripartite. The factors to be examined are the scope of the
comments and their relationship to the proceeding, the
extent of any curative instructions, and the strength of the
evidence against defendants. Zehrbach, 47 F.3d at 1265.

Here, the prosecution depended on testimony from
Liebmann and Atallah to establish that the discussions
with defendants at the LaGuardia meeting were about price
fixing. The prosecution claimed that the parties entered into
an agreement to fix prices at LaGuardia. The defense
argued and presented evidence that they were meeting for
the permissible purpose of discussing a joint venture or
merger. The credibility of Liebmann and Atallah was a
crucial issue which both sides addressed during their
closing arguments.

The "two-for-one" comment was made toward the end of
the prosecutor's closing argument. Immediately after the
prosecutor finished, the court excused the jury. Amcel's
defense counsel then moved for a mistrial, primarily
objecting to the prosecutor's reference to the witnesses'
guilty pleas as involving a conspiracy. Iacovelli and
Dispoz-O joined in Amcel's objections and objected
specifically to the vouching comment. At this point, the
judge only commented on the "conspiracy" reference --
resolving to address it during the jury charge and advising
the prosecutors that they had a chance to cure any harm
during their rebuttal, which was about to begin. Later, at
the end of the government's rebuttal, the judge dismissed
the jury until the next day, and defense counsel renewed its
motion for a mistrial. The judge denied the motion, subject
to revisiting it after trial if defendants were convicted. The
next day, at the beginning of its charge to the jury, the
judge specifically addressed the "conspiracy" issue, but not
the "two-for-one" comment.

                               18
Although the law assumes that jurors follow the
instructions they receive, Richardson v. Marsh , 481 U.S.
200, 206, 107 S.Ct. 1702, 95 L.Ed.2d 176 (1987), the
circumstances surrounding the curative instructions are to
be examined under the Zehrbach test. First, the
instructions given here were not specifically directed to the
statements of the prosecutor. Instead, the judge generally
instructed the jury to evaluate the credibility of witnesses
who pled guilty because they might be motivated to lie. The
judge told the jury that an important way of determining
whether the government had proved defendants guilty
beyond a reasonable doubt was to evaluate the witnesses'
testimony. The jury was not informed, however, that the
prosecutor's statement about bargaining policy could not be
considered as evidence. The instructions, thus, were not
curative of the prosecutor's comment, see Government of
Virgin Islands v. Mujahid, 990 F.2d 111, 116 (3d Cir. 1993),
and we are not convinced that they adequately neutralized
the harm caused by the prosecutor's reference to the
government's policy in making "two-for-one" deals.

The final factor to be considered is the closeness of the
case. During its closing, the prosecution made it clear that
Liebmann's and Atallah's testimony was central to the
strength of its case: "[Y]ou have heard from roughly 18
witnesses and seen hundreds of documents, but this case
still comes down to that one issue: did the defendants
secretly meet at LaGuardia, Andrew Liebmann and Basem
Atallah, and agree to fix prices on cutlery or instead did
they meet to discuss a three-way joint venture?" 11 Later,
asserting that an agreement need not be reached in writing
and could be established "by a wink of an eye," he stated,
"And that is why the issue is what happened at LaGuardia
because once the agreement is reached, the crime is
complete." Then, after describing the LaGuardia meeting
according to Liebmann's and Atallah's testimony, the
prosecutor told the jury:
_________________________________________________________________

11. The prosecutor went on to state that the phone records, faxes, and
other documents "corroborate" the witnesses' testimony. The final
component of his proof was evidence that establishing that Iacovelli lied
to the FBI and testified falsely.

                               19
       That's the agreement. At that point in time the crime
       was committed, the crime was complete. Those
       defendants and Polar fixed prices, they are guilty of
       price fixing. Nothing else has to be shown in order to
       convict them of price fixing.

        Now, what happened afterwards is additional proof
       that they fixed prices. And you'll see, there is plenty
       more proof, but the agreement, the agreement was
       reached at LaGuardia.

The witnesses' testimony was clearly central to the
government's case. Without it, the prosecution could not
establish that there was an agreement to fix prices. The
defense, recognizing that, endeavored to develop an
alternative theory of the discussions and sharing of pricing
information. We find the crucial nature of the witnesses'
testimony to be an important factor in determining whether
the prosecutor's remark was prejudicial. See Molina-
Guevara, 96 F.3d at 705. When we consider the
significance of Liebmann and Atallah's credibility and
compare that to the general nature of the court's
instructions, we are not left with the "sure conviction that
the error did not prejudice the defendant," Zehrbach, 47
F.3d at 1265. Consequently, Iacovelli and Dispoz-O's
convictions cannot stand.

Dispoz-O also challenges as vouching a second portion of
the government's closing, during which the prosecutor
stated as follows:

       Common sense tells you people don't confess to a
       crime, they don't turn a completely innocent, legitimate
       business meeting into a crime, they don't confess to
       crimes they didn't commit and that's what the
       defendants are trying to tell you they did.

        Now obviously they got credit for their cooperation;
       that's the way it works. But that misses the point. Why
       would Liebmann and Atallah say they fixed prices at
       LaGuardia? Why would they tell that to the
       Government, why would they tell that to the judge who
       sentenced them? Why would they tell that to their
       customers, their customers, if it didn't happen? Think
       about that.

                               20
Dispoz-O objects to the first part of these remarks on the
ground that the prosecutor expressly told the jury that
Liebmann's and Atallah's convictions conclusively
established the criminality of the LaGuardia meeting. The
nature of these remarks was an appeal to the jury's
common sense regarding the witnesses' credibility. Because
the remarks were a request to the jury to view the evidence
in the light most favorable to the prosecutor's case, they
were not improper. Walker, 155 F.3d at 189.

Dispoz-O also contends that the prosecutor's reference to
Liebmann's and Atallah's statements that they fixed prices
at LaGuardia constituted vouching. However, a review of
the record reveals that Liebmann and Atallah testified that
they fixed prices at LaGuardia and that the defense
challenged the truth of their testimony. Because the
prosecutor's remark about fixing prices referred to evidence
presented in the record, it does not constitute vouching.
United States v. Dolasco, 470 F.2d 1297, 1299 (3d Cir.
1972).

III. CONCLUSION

For the foregoing reasons, we will reverse the judgment of
the District Court and remand this case for a new trial for
Iacovelli and Dispoz-O.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               21
