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*Note: The following opinion was edited by AudioCaseFiles' staff.
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United States v. Doerr
886 F.2d 944
United States Court of Appeals, Seventh Circuit, 1989

RIPPLE, Circuit Judge.

In April 1987, a grand jury returned a two-count indictment against the five appellants in this case. The first count charged each of the five appellants with conspiring to travel in and use the facilities of interstate commerce to promote, carry on, and distribute the proceeds of unlawful activities involving prostitution. . . . The second count charged two of the appellants, John Paul Doerr and Josephine Christofalos, with conspiring to defraud the United States by obstructing the lawful functions of the Internal Revenue Service (IRS). . . . After a lengthy jury trial, each of the appellants was found guilty of the offense charged in Count One, and John Paul Doerr and Ms. Christofalos were found guilty of the offense alleged in Count Two. All five appellants now challenge their convictions. . . . We affirm the convictions of all the appellants.

The prostitution activities underlying the offense alleged in Count One of the indictment were concentrated in three businesses that were part of an entity known as Worldwide Enterprises, Incorporated: the WW I Club, located in Kenosha County, Wisconsin; the Relaxation Health Systems massage parlor located next to the WW I Club in Kenosha County; and the WW II Club, located in Lake County, Illinois. The clubs were nude dancing establishments that served no food or alcoholic beverages. The testimony at trial revealed that the prostitution activities at the clubs were conducted pursuant to the following general procedure. A customer entering the club would be required to pay a cover charge. He would then be directed to a table and joined by a "dancer." After being seated, a waitress would approach the customer and ask him if he would like to purchase a drink (water or a soft drink) for himself and the dancer. Once the customer had purchased a drink, the waitress would return and ask the customer if he would like to go to a private area with the dancer. If the customer agreed and purchased a bottle of soda or water, at a cost of forty to fifty dollars, he would be taken to a "terrace," consisting of a number of booths, in the rear of the club. The customer would then be asked to buy additional bottles, and, once sufficient bottles had been purchased, the dancer would engage in sexual acts with the customer.

At the massage parlor, the customer would pay a flat fee for thirty minutes in a private room with a masseuse. The masseuse would then negotiate a "tip" with the customer. The amount of the tip would determine the degree of sexual contact that the masseuse had with the customer. At both the clubs and the massage parlor, customers could pay in cash or by credit card.

[The defendants appeal on the issue of whether statements by a customer and one of the defendant's half brother are admissible as exceptions to the hearsay rule under Federal of Evidence 801(d)(2)(E).]

The coconspirator exception to the hearsay rule, Fed.R.Evid. 801(d)(2)(E), provides that a statement is not hearsay if it is "offered against a party and is . . . a statement by a coconspirator of a party [made] during the course and in furtherance of the conspiracy." The appellants maintain that two out-of-court statements admitted at trial failed to satisfy the "in furtherance" requirement of the coconspirator exception. In the first challenged statement, Robert Meyer, a frequent customer at the Kenosha club, testified about a conversation between himself and Mr. Pixley in which the two discussed a red curtain at one of the clubs. Meyer testified that Mr. Pixley "mentioned that when he was hired back there that Josephine had a curtain put up in the terrace or the patio area, how ridiculous it was, it was asking for problems with the police.". . . In the second challenged statement, John Patrick Doerr, Dale Doerr's half brother, testified that, in a conversation with his brother, Dale had laughed at him and said "I can't believe -- I don't believe -- I can't believe you don't know what's going on, or you didn't know what's going on." Tr. at 999. While conceding that these two statements may have been admissible against their declarants, Mr. Pixley and Dale Doerr, the appellants maintain that they should not have been admitted against the nondeclarant appellants because the statements were not made "in furtherance" of the conspiracy. Thus, they contend, Rule 801(d)(2)(E) was not satisfied.

We recently emphasized that the "in furtherance" requirement of Rule 801(d)(2)(E) is a limitation on the admissibility of coconspirators' statements that is meant to be taken seriously . . . , a coconspirator's statement satisfies the "in furtherance" requirement "when the statement is 'part of the information flow between conspirators intended to help each perform his role.'" Id. (quoting United States v. Van Daal Wyk,. . .). We further explained that statements "in furtherance" of a conspiracy can take many forms, including statements made to recruit potential coconspirators, statements seeking to control damage to an ongoing conspiracy, statements made to keep coconspirators advised as to the progress of the conspiracy, and statements made in an attempt to conceal the criminal objectives of the conspiracy. Id. Narrative declarations, mere "idle chatter," and superfluous casual conversations, however, are not statements "in furtherance" of a conspiracy. See id.; see also United States v. Foster,. . . (mere narrative declarations, made without intent to induce assistance to the conspiracy, do not satisfy the "strict requirements" of Rule 801),. . .; United States v. Lieberman,. . . (challenged testimony "smack[ed] of nothing more than casual conversation about past events. It is difficult to envision how it would have furthered the conspiracy.").

A district court's finding that a particular statement was made "in furtherance" is reviewed under a clearly erroneous standard. United States v. Shoffner. . . . In addition, a court may conclude that the challenged statement was "in furtherance" even though "'the statement [was] susceptible of alternative interpretations.'". . . (quoting United States v. Mackey. . . ). Moreover, the "in furtherance" requirement is satisfied so long as "'some reasonable basis exists for concluding that the statement furthered the conspiracy.'" . . .

The government contends that the district court had a reasonable basis for concluding that Mr. Pixley's statements, described at trial by Meyer, were made "in furtherance" of the conspiracy. The government explains that, in addition to being a frequent customer, Robert Meyer had an interest in investing in the Kenosha club. Given this interest, the government asserts that "the trial court had a 'reasonable basis' for concluding that Pixley's comments were made in furtherance of the conspiracy since Pixley and Meyer had an interest in discussing ways that the club could improve and remain in operation." Government Br. at 19. The government also contends that Dale Doerr's statement was "in furtherance" of the conspiracy, because it was a description of the clubs' illegal activities to John Patrick Doerr, a coconspirator who worked at the clubs as a manager and doorman.

We cannot accept the government's contentions. Therefore, we conclude that the district court erred in admitting the challenged testimony. Neither Mr. Pixley's statement nor Dale Doerr's statement was made "in furtherance" of the conspiracy. After reviewing Robert Meyer's testimony, we conclude that Mr. Pixley's discussion of the red curtain with Meyer cannot reasonably be characterized as part of an attempt to induce Meyer to join or assist the conspiracy. Instead, the statements are more accurately characterized as a narrative discussion of a past event. As such, they do not satisfy the "in furtherance" requirement of Rule 801(d)(2)(E). [Footnote 7]

========= Footnote 7 ==========
The district court itself had concluded that discussions between Mr. Pixley and Meyer regarding investment by Meyer in the club were not in furtherance of the conspiracy. . . . The court had, however, concluded that Mr. Pixley's statements about the red curtain were "in furtherance," because they illustrate a "desire to increase the efficiency in the remunerative nature of the conspiracy.". . . While the statements may in fact illustrate such a desire on the part of Mr. Pixley, the district court's finding does not explain how making this statement to Meyer in any way furthered the conspiracy.
========== End Footnote ==========

Similarly, Dale Doerr's statement to John Patrick Doerr fails to satisfy the "in furtherance" requirement. In making the statement recounted by John Patrick Doerr at trial, Dale was mocking his half-brother's ignorance of the clubs' unlawful activities; such a statement cannot be characterized as part of the normal information flow between co-conspirators and in no way furthered the ends of the conspiracy. Thus, neither Mr. Pixley's statement nor Dale Doerr's statement should have been admitted under Rule 801(d)(2)(E).

[W]e affirm the convictions of Dale Doerr, John Paul Doerr, Josephine Christofalos, Christa Pixley, and Archie Pixley.

AFFIRMED.

This case is in these books

• Evidence: Cases and Materials
• Waltz, Park
• 10th Edition