United States v. Dehlinger, No. 12-7121

Decided: January 23, 2014

The Fourth Circuit Court of Appeals affirmed the judgment of the district court, denying the defendant habeas relief. The Fourth Circuit held that the trial counsel’s failure to call three witnesses, who were involved in the same fraudulent tax scheme as the defendant, was an objectively reasonable strategic decision.

The defendant, Dr. Erik Dehlinger (“Dehlinger”), was convicted of three counts of filing false income tax returns. Dehlinger was involved with Anderson’s Ark and Associates (“AAA”), which marketed programs enabling users to avoid current income tax liability and “recapture” taxes paid in the previous two years. Dehlinger avoided $363,207 in tax liability and obtained annual refunds. Dehlinger retained Scott Engelhard (“Engelhard”) based largely on Engelhard’s relative success as court-appointed counsel for AAA planner Tara LaGrand (“LaGrand”) in her 2004 trial. Before undertaking representation of Dehlinger, Engelhard obtained a conflict waiver from LaGrand and, therefore, no longer represented LaGrand. However, when LaGrand was later subpoenaed to testify in the prosecution of other AAA clients, Engelhard was re-appointed to serve as LaGrand’s counsel due to his familiarity with the AAA prosecutions. Engelhand filed a motion to quash the subpoena of LaGrand. Dehlinger fired Engelhard when he learned that Engelhard had filed this motion on behalf of LaGrand.

On appeal, Dehlinger contended that, in preparation for and during his trial, Engelhard labored under an active conflict of interest because of Engelhard’s history with LaGrand, Kuzel, and Redd.

In order to establish constitutionally deficient performance on the basis of an alleged conflict of interest, a defendant, like Dehlinger, who has raised no objection at trial, must establish that (1) an actual conflict of interest (2) adversely affected his lawyer’s performance. In order to establish that the conflict of interest adversely affected his lawyer’s performance, the defendant must satisfy the three-prong test set forth in Mickens v. Taylor: (i) identify a plausible alternative defense strategy or tactic, (ii) show the alternative strategy or tactic was objectively reasonable, and (iii) show failure to pursue that strategy or tactic was linked to the actual conflict.

Like the district court, the Fourth Circuit based its denial of Dehlinger’s request for habeas relief on its determination that—even assuming arguendo than an actual conflict of interest existed—Dehlinger failed to satisfy the third prong of Mickens. The court focused on whether Engelhard’s decision to call witnesses other than LaGrand, Kuzel, and Redd was “linked” to the asserted conflict, or instead was the product of a legitimate trial strategy.

Dehlinger, as the defendant, bears the burden of proving the requisite “link” and, therefore, must show Engelhard’s decision was not objectively reasonable. With regard to potential witnesses Kuzel and Redd, Dehlinger barely knew them and they had not prepared any of his tax returns. Thus, it is unlikely that either of them would have been permitted to testify as to Dehlinger’s assertedly innocent state of mind. Even if they were, Dehlinger failed to demonstrate that they could have provided testimony not elicited from the defense witnesses who did testify on his behalf at trial. As to LaGrand, Engelhard believed that the risk of LaGrand’s testimony outweighed the benefits, and informed Dehlinger of this strategy, as seen in several emails. The strategic considerations that led Engelhard to conclude that calling LaGrand would be “too risky” were objectively reasonable. Not only was LaGrand a convicted felon, she had also pled guilty to tax fraud involving the very same fraudulent organization that provided the basis of its charges against Dehlinger. In addition, LaGrand had a history of conflicting statements made under oath about this tax fraud and played no part in Dehlinger’s decision to follow the AAA tax “plan.”

Full Opinion

– Sarah Bishop

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