Mark Hazelwood Request For New Judge and New Trial Sept. 4th, 2019 Appeal 53-Pages

Case: 18-6023 Document: 67 Filed: 09/04/2019 Page: 1
No. 18-6023
_________________________
UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT
_________________________
UNITED STATES,
Plaintiff-Appellee,
v.
MARK HAZELWOOD,
Defendant-Appellant.
_________________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TENNESSEE AT
KNOXVILLE
NO. 3:16-CR-20
_________________________
REPLY BRIEF OF APPELLANT

_________________________
Shon Hopwood David Debold

Counsel of Record Megan B. Kiernan
Kyle Singhal GIBSON, DUNN & CRUTCHER LLP
LAW OFFICE OF 1050 Connecticut Ave. N.W.
SHON HOPWOOD PLLC Washington, D.C. 20036
3106 15th Street N.E. Telephone: (202) 955-8551
Washington, D.C. 20017 ddebold@gibsondunn.com
Telephone: (202) 662-9559
shonrhopwood@gmail.com
Counsel for Appellant Mark Hazelwood


TABLE OF CONTENTS
INTRODUCTION ....................................................................................... 1
I. The Highly Inflammatory Recordings Were Inadmissible
Under Rule 403. ....................................................................................... 5
A. Under every government theory of admissibility, the
Recordings had little to no probative value. ....................................... 5
B. The government improperly minimizes the
Recordings’ highly prejudicial nature. .............................................. 10
C. The government’s alternative arguments for
admissibility under Rule 403 are unconvincing. .............................. 13
II. The Recordings Were Also Inadmissible Under Rules
401, 404, and 405. .................................................................................. 18
A. Rule 401 Is Not a Standalone Basis for the Recordings’
Admissibility. ...................................................................................... 18
B. The Government’s theory of admissibility under Rule
404(b) is contrary to this Court’s published opinions. ...................... 19
C. The Recordings Were Also Inadmissible Under Rules
404(a) and Rule 405............................................................................ 24
III. The Admission of the Recordings Is Reversible Error
Because Evidence of Hazelwood’s Guilt Was Not
Overwhelming. ...................................................................................... 26
IV. The District Court Erred As A Matter Of Law In
Allowing The Government To Introduce Expert Testimony
Under The Rule Governing Lay Opinions. .......................................... 32
A. Darren Seay’s testimony failed Rule 701(c)’s
requirement that it not be based on technical or
otherwise specialized knowledge. ...................................................... 32
B. The district court’s error in admitting Seay’s
testimony was prejudicial. ................................................................. 36
V. Remand is Required for an Evidentiary Hearing on
Hazelwood’s New Trial Motion. ............................................................ 37
i

VI. Remand for Resentencing Is Required In the

Alternative. ............................................................................................ 42
VII. Judicial Reassignment Is Warranted in This Case. .................... 44
CONCLUSION ......................................................................................... 47
ii


TABLE OF AUTHORITIES
Cases
Ayissi-Etoh v. Fannie Mae, 712 F.3d 572 (D.C. Cir. 2013) ..................... 12
Iancu v. Brunetti, 139 S. Ct. 2294 (2019) (Breyer, J., concurring) ........ 16
Martinez v. Court of Appeal of California, Fourth Appellate Dist.,

528 U.S. 152 (2000) (Scalia, J., concurring in the judgment) ............. 41
Old Chief v. United States, 519 U.S. 172 (1997) ............................... 12, 18
Paschal v. Flagstar Bank, 295 F.3d 565 (6th Cir. 2002) ........................ 17
Robinson v. Runyon, 149 F.3d 507 (6th Cir. 1998) ................................. 13
United States v. Al-Din, 631 F. App’x 313 (6th Cir. 2015) ..................... 11
United States v. Arny, 831 F.3d 725 (6th Cir. 2016) ............................... 40
United States v. Asher, 910 F.3d 854 (6th Cir. 2018) ............................. 21
United States v. Bell, 516 F.3d 432 (6th Cir. 2008) ................................ 13
United States v. Caver, 470 F.3d 220 (6th Cir. 2006) ............................. 11
United States v. Clay, 667 F.3d 689 (6th Cir. 2012) ................... 15, 26, 29
United States v. Cota-Luna, 891 F.3d 639 (6th Cir. 2018) ............... 45, 46
United States v. Ebens, 800 F.2d 1422 (6th Cir. 1986) ..................... 11, 12
United States v. Ganier, 468 F.3d 920 (6th Cir. 2006) ........................... 33
United States v. Hart, 70 F.3d 854 (6th Cir. 1995) ................................. 26
United States v. Johnson, 634 F.2d 735 (4th Cir. 1980) ................... 23, 24
iii


United States v. Johnson, 27 F.3d 1186 (6th Cir. 1994) ......................... 13
United States v. Kerley, 784 F.3d 327 (6th Cir. 2015) ...................... 35, 36
United States v. Magleby, 241 F.3d 1306 (10th Cir. 2001) ..................... 13
United States v. Merriweather, 78 F.3d 1070 (6th Cir. 1996) .... 12, 13, 20
United States v. Mireles, 442 F. App’x 988 (5th Cir. 2011) .................... 22
United States v. Munoz, 605 F.3d 359 (6th Cir. 2010)...................... 37–39
United States v. Newsom, 452 F.3d 593 (6th Cir. 2006) ......................... 28
United States v. Owens, 159 F.3d 221 (6th Cir. 1998) ............................ 11
United States v. Patel, 485 F. App’x 702 (5th Cir. 2012) ........................ 23
United States v. Powell, 469 U.S. 57 (1984) ............................................ 17
United States v. Reese, 568 F.2d 1246 (6th Cir. 1977) ............................ 24
United States v. Robin, 553 F.2d 8 (2d Cir. 1977) .................................. 45
United States v. Stout, 509 F.3d 796 (6th Cir. 2007) .............................. 16
United States v. Uzenski, 434 F.3d 690 (4th Cir. 2006).................... 23, 24
Weaver v. Massachusetts, 137 S. Ct. 1899 (2017) ................................... 41
Rules of Evidence
Fed. R. Evid. 401 ................................................................................ 18, 25
Fed. R. Evid. 403 ...................................................................... 5, 13, 18, 26
iv


Fed. R. Evid. 404 ...............................................................................passim
Fed. R. Evid. 405 ................................................................................ 18, 24
Fed. R. Evid. 701 ................................................................................ 32–34
Fed. R. Evid. 702 ................................................................................ 32–34
Other Authorities
John Bowden, Tesla Stock Falls as Elon Musk Smokes Marijuana on

Video, The Hill (Sept. 7, 2018) .............................................................. 20
Josh Barro, The Trump Boycotts Pose a Grave Danger to the

Equinox and SoulCycle Businesses, N.Y. Magazine (Aug. 9, 2019) .... 20
Melissa Mohr, Holy Sh*t: A Brief History of Swearing (2013) ............... 16
T. Jay et al., Recalling Taboo and Nontaboo Words, American Journal

of Psychology, Spring 2008, v. 121 ....................................................... 16
Todd Spangler, CBS Stock Tumbles on Reports of Sexual-Harassment

Allegations Against CEO Leslie Moonves, Variety .............................. 20
U.S. Sentencing Guidelines § 2B1.1 ........................................................ 42
v


INTRODUCTION
The government does not seriously dispute how prejudicial it was to
play three audio recordings (the “Recordings”) of a defendant using
some of the most vile racist and sexist words in the English language.
In fact, the government says it should win because “the offensive nature
of” Hazelwood’s conduct was of “such magnitude” that the Recordings
could have brought down a multi-billion-dollar company. Gov’t Br. 77.1
Thus, the question is whether probative value supported playing them
despite the visceral responses they undoubtedly evoked. While the
answer might be different in a hate-crime prosecution where a
defendant insists he is not a racist, these Recordings had no offsetting
probative value in a prosecution for fraudulent fuel pricing. This error,
in the absence of overwhelming proof of guilt, requires reversal.
Neither the government nor the district court has offered a theory
that it is comfortable sticking with for how this poisonous evidence was
probative. And each new theory, ending with the government’s latest
“motive” rationale, falls well short.
The government started in the district court with the argument that
1
“Br.” refers to Hazelwood’s Opening Brief, and “Gov’t Br.” refers to
the Government’s Response Brief.
1

the content of the Recordings rebutted supposed character traits of
sound business judgment and authentic humanitarian goodwill toward
truck drivers. But the district court correctly held that the Rules of
Evidence disallow extrinsic evidence (here, the Recordings) to rebut
character traits. Yet, for the first time in this case, the government now
contends that violating those rules by playing the three audio
Recordings with more than eight minutes of extremely offensive
language was somehow fairer to Hazelwood than briefly questioning a
witness on redirect examination. Gov’t Br. 75. This Court should not
credit a highly untenable finding that the government never sought and
the district court never made.
On appeal, the government adds an argument that it failed to
present at all below: the Recordings rebut a so-called “lack of motive”
defense. Gov’t Br. 59. But Hazelwood’s defense was not that he “would
never do anything to jeopardize Pilot’s reputation or success,” Gov’t Br.
43, nor was the jury instructed on this new rebuttal theory that the
Recordings show a motive to defraud. Hazelwood’s defense, documented
in hundreds of pages of transcripts, was that he did not learn about a
handful of employees committing penny-ante fraud against a small
2

number of Pilot’s customers because he was too busy running and
growing Pilot. E.g., Opening Statement, R.520, PageID#13345. And the
cross-examination at issue here was simply a government witness’s
acknowledgment that it would be “dumb” to risk strong customer
relationships by stealing paltry amounts from them. Tr.104:10–11,
R.361, PageID#9389.
No matter how that cross-examination is portrayed, there was no
legitimate role for the Recordings. Proper rebuttal would have been
testimony that the defendant stood to gain despite risk to customer
relations or that the risk of discovery was low. But instead of
responding that the risk-reward calculus here favored fraud, the
government invited the jury to find that Hazelwood engaged in
completely unrelated and highly offensive conduct that was all risk with
zero possible reward.
The Recordings have weak probative value, at best, even under the
government’s misguided view that it was fair game to introduce
extrinsic evidence of Hazelwood’s alleged propensity (a so-called
“character trait”) for doing dumb or risky things. Hazelwood had no
reason to think his statements were being recorded or would become
3

public. Nor was there reason for him to think they would bring down
anyone but himself, which is precisely what happened when Pilot
learned of the Recordings and fired him.
Balanced against the flimsy claim of probative value is the obvious
prejudice of painting Hazelwood as a racist and sexist in the jury’s eyes.
The government said it wanted the jury to view Hazelwood’s language
as the words of a “racist,” Motion Mem. 7, R.372, PageID#9741, and it
got what it wanted. The government has not identified a single case
allowing such incendiary evidence in a criminal trial, even where
bigotry was at issue.
This was a close case, resting on weak inferences that out of the
thousands of trip reports that Pilot’s employees drafted, Hazelwood, an
extremely busy executive, happened to read a handful carefully enough
to realize that they contained brief and often cryptic allusions to
improperly withheld discounts. The error in admitting the Recordings
in this close case unfairly prejudiced Hazelwood, denying him a fair
trial. This and the other independent errors require reversal.
4

I. THE HIGHLY INFLAMMATORY RECORDINGS WERE INADMISSIBLE

UNDER RULE 403.
The government’s argument for admissibility under Rule 403
depends on the Recordings’ content being “offensive” to “such magnitude
that, if discovered or known to the public at that time, it would likely
have placed Pilot in jeopardy.” Gov’t Br. 77. This argument—that
probative value increases as the prejudice grows—could prevail, if ever,
only where bigotry was a central element of the offense, such as in a
hate-crime prosecution. But, this being a fraud case, the district court
readily acknowledged that the Recordings “do[] not go to any of the
elements of the offenses” charged. Tr.25:25–26:1, R.424,
PageID#10421–22. Cross-examination eliciting that it would be a
“dumb business decision” to commit this type of fraud did not justify
playing Recordings that, in the government’s own words, the jury was
“likely to view as racist.” Motion Mem. 7, R.372, PageID#9741. These
unfairly prejudicial Recordings fail Rule 403’s test for admissibility.
A. Under every government theory of admissibility, the

Recordings had little to no probative value.
The government on appeal defends the Recordings as proper
rebuttal to a lack-of-motive defense. Gov’t Br. 59, 64, 69. But lack of
motive was not Hazelwood’s defense, this new rebuttal theory was not
5

presented to the jury, and the Recordings would be improper rebuttal
even if the theory had been.
1. The government ignores Hazelwood’s actual defense: (1) he was
too busy growing the company to learn of a relatively small fraud, and
(2) the government failed to meet its burden of proving otherwise
through trip reports and other documents. Hazelwood’s counsel
developed testimony that this leader of a successful, privately held
multi-billion-dollar corporation, with extensive responsibilities, was
flying hundreds of times each year to meet with truck stop operators
and clients. See, e.g., Tr.24:24–25:11, R.520, PageID#13361–62.
Ignoring what really happened at trial, the government now attributes
to Hazelwood a “defense theory” that he “would never do anything to
jeopardize Pilot’s reputation or success.” Gov’t Br. 43; see also id. at 59
(“his defense that he would never do anything to jeopardize the
company”), 77 (“his defense that he would never engage in conduct that
risked such consequences” and “would not do anything to jeopardize
Pilot”) (emphases added).
This “theory” is contrived. The testimony defense counsel elicited
from Brian Mosher was that Hazelwood was “a good businessman,” and
6

that “it ma[de] no sense” and would be “a dumb business decision” to lie
to customers, “taking the chance of everything coming down.”
Tr.104:10–105:8, R.361, PageID#9389–90. That is a far cry from asking
whether Hazelwood would ever do anything to harm Pilot or its
customers.
2. No matter how the defense is characterized, the Recordings were
of little to no value in rebutting it. The government’s brief here cites
cross-examination testimony that Hazelwood cared about customers
and that it would be dumb to risk spoiling a relationship with them
when Hazelwood was committed to bringing Pilot and customers close
together. Gov’t Br. 39–40 & 43.
Rebuttal for these points would be evidence (if any existed) that
Hazelwood cared little for customers or Pilot, or that the possible
reward for this fraud was worth the risk. The racist and misogynistic
language that the government offered instead was nothing of the sort.
The statements were not directed at customers or truck drivers, and
they did not touch at all on Hazelwood’s relationships with them or his
willingness to take risks to achieve financial or other rewards.
7

The Recordings lack meaningful probative value even under the
government’s misguided view of the defense. Compared to the risks of
engaging in a multi-year criminal conspiracy to defraud customers, any
risk to Pilot from using offensive language in private was remote.
Hazelwood had no reason to think that anyone was wearing a wire or
might publicize what was said. And his language ultimately placed only
himself in jeopardy: Pilot terminated him when it learned of the
Recordings. Unlike taking a risk that customers might examine their
own records and realize they were cheated out of fuel price discounts,
the Recordings shed only the dimmest light on a supposed willingness
to put Pilot in danger.
Nor does the government address the separate flaw that its
admissibility argument directly contradicts its own theory of guilt. That
theory, which the district judge credited at sentencing, was that
Hazelwood was willing “to go after every angle,” including illegal ones,
to make Pilot the leader in the truck stop industry at a time when the
“pie” was “gettin’ smaller.” Gov’t Br. 1–2. But, according to the
government, the Recordings show Hazelwood’s willingness to do the
opposite: risk bringing Pilot down through inappropriate behavior that
8

had no potential to increase Pilot’s business—i.e., the Recordings
carried only the possibility of less, not more, “pie.”
The government protests that the Recordings were its only
opportunity to rebut its own witness’s concessions that it would be
dumb for Pilot’s president to defraud valued customers for so little gain.
See Gov’t Br. 77–78. First, that is factually wrong. The government was
allowed to rebut Hazelwood’s high regard for customers with evidence
that he referred to customers coarsely (“Rebate, rebate, masturbate,
make him feel special.”), Tr.223:25, R.424, PageID#10619; GX 2194,
A127; and questioned their sophistication (“Customer B doesn’t even
know you have an orifice.”), GX 522-A, A579. It repeatedly invoked
these examples as proof of Hazelwood’s guilt. See Tr.42:25–43:3, R.333,
PageID#7007–08; Tr.223:23–25, R.424, PageID#10619; Tr.28:4–5,
R.513, PageID#13135.
Second, the government had no good way to rebut Mosher’s cross-
examination testimony because it undeniably would be risky for the
leader of a company like Pilot to cheat customers out of such small
amounts of money when the potential backlash from disclosure of the
fraud would be so great. If the government is right that the “chain of
9

reasoning” from Mosher’s cross-examination ended with “Hazelwood
had no reason to commit the fraud,” Gov’t Br. 67, proper rebuttal would
have been proof that he did have some reason (a motive), despite the
risks, to defraud customers out of small amounts of money, be it greed,
hubris, or whatever. Instead, the government diverted attention from
this insurmountable weakness in its case by labeling Hazelwood a
racist and sexist.
B. The government improperly minimizes the Recordings’

highly prejudicial nature.
Whatever minimal probative value the Recordings had must be
measured against their prejudicial effect, which was palpable. The jury
heard Hazelwood himself making racist jokes, using racist and sexist
epithets including the n-word and b***h, and listening to and laughing
about what the participants called the “greasy n****r song.” GX 530-A
A88; see also GX 529-A A85–87 (Hazelwood: “Cleveland, it ain’t nothin’
but n****rs.”). Every racial and sexist slur used by Hazelwood and
others was also featured in court-provided transcripts. Br. 20.
The government has not identified a single case allowing use of
evidence with this level of prejudice. In every case it cites, the proofs
had greater probative value and caused less prejudice than the
10

Recordings. In United States v. Owens, 159 F.3d 221, 224, 226 (6th Cir.
1998), for example, the evidence was merely a defendant’s enforcement
of “certain racist policies in his clubs,” and it was probative of a
witness’s bias. In United States v. Al-Din, 631 F. App’x 313, 324 (6th
Cir. 2015), the evidence was an African American defendant’s use of the
n-word in a letter that was probative of his consciousness of guilt. And
in United States v. Caver, 470 F.3d 220, 241 (6th Cir. 2006), the
evidence was letters the defendant wrote, containing “derogatory terms
for counsel and the criminal justice system,” that were probative of his
obstruction of justice.
Even in United States v. Ebens, 800 F.2d 1422, 1432–34 (6th Cir.
1986), a civil-rights prosecution where this Court held the admission of
evidence to be reversible error, the evidence was far less prejudicial: a
witness’s testimony that the defendant used the n-word at a bar nine
years earlier. This Court found such proof, even though much less
inflammatory than the Recordings, to be “highly prejudicial to the
rights of” the defendant, explaining “[i]t does not take much
imagination to understand how such grossly biased comments would be
viewed by the jury” when “nearly all citizens find themselves repelled
11

by such blatantly racist remarks and resentful of the person claimed to
have uttered them.” Id. at 1432–34.
As noted above, the district court allowed the government to counter
Hazelwood’s defense with evidence he used unflattering language about
some customers. But courts are required to keep out “the most unfairly
prejudicial means” of rebuttal. See United States v. Merriweather, 78
F.3d 1070, 1077 (6th Cir. 1996). Evidence that Hazelwood made light of
unsophisticated customers is one thing. Playing tapes of Hazelwood
using “probably the most offensive word in English” is something else
entirely. Ayissi-Etoh v. Fannie Mae, 712 F.3d 572, 580 (D.C. Cir. 2013)
(internal quotation marks omitted). Any probative value was
substantially outweighed by the danger of unfair prejudice.
A juror “repelled by” and “resentful” of someone who uttered
“blatantly racist remarks,” Ebens, 800 F.2d at 1434, is more likely to
infer that he was a bad person and, therefore, both capable of other bad
things (like fraud) and less deserving of outright acquittal in a close
case. See Old Chief v. United States, 519 U.S. 172, 180–81 (1997)
(noting that jurors could “tak[e]” a bad act “as raising the odds he did
the later bad act now charged,” and that a jury “uncertain of guilt”
12

might also “convict anyway because a bad person deserves
punishment”); United States v. Bell, 516 F.3d 432, 445 (6th Cir. 2008);
United States v. Johnson, 27 F.3d 1186, 1193 (6th Cir. 1994) (“the
likelihood is very great that the jurors will use” prior bad acts “evidence
precisely for the purpose it may not be considered,” i.e., propensity). It is
hard to imagine more unfairly prejudicial evidence. If Hazelwood is to
serve a 150-month prison term, it should be for the conduct charged, not
for incendiary remarks unrelated to that conduct.
C. The government’s alternative arguments for admissibility

under Rule 403 are unconvincing.
None of the government’s reasons for ignoring this Court’s warnings
of undue prejudice, and none of the cases it cites, can save the ruling
below. See Gov’t Br. 77–81.
1. Even in cases where the proffered evidence was less prejudicial,
such evidence was admitted only where either a charged offense or the
offered defense theory directly placed the existence of bigotry “in issue.”
Merriweather, 78 F.3d at 1077; see also, e.g., Robinson v. Runyon, 149
F.3d 507, 514–15 (6th Cir. 1998) (finding evidence of racist language
admissible in Title VII discrimination case); United States v. Magleby,
241 F.3d 1306, 1318 (10th Cir. 2001) (evidence that defendant sang
13

racist albums by heart admissible to show racial animus in trial for
racially motivated harassment by cross-burning). But eliciting
testimony that it would be dumb to risk a company’s reputation by
committing fraud did not place bigotry, sexism, or any other offensive
conduct or views at issue. Nor did it justify the most extreme option of
playing audio with the defendant using some of the worst racist and
sexist words imaginable.
2. The district court’s “precautions,” Gov’t Br. 78–79, were not nearly
sufficient to negate the unfair prejudice. The jurors returned from a
one-month break, during which the court’s decision to admit the
Recordings generated “a lot of media coverage,” Tr.15:2, R.424,
PageID#10411, to hear more than eight minutes of Hazelwood and his
companions using and laughing about racist and misogynist slurs. Even
worse, the court’s instructions invited the jury to focus on the offensive
nature of the Recordings in deciding whether Hazelwood would engage
in conduct likely to endanger Pilot. The jurors thus knew they were
hearing the Recordings only because the language was potentially awful
enough (in the government’s words, “of such magnitude”) to put a multi-
billion-dollar company at risk. Tr.24:21–26:3, R.424, PageID#10420–22.
14

This was a major distraction from an otherwise weak case. Far from
minimizing the prejudicial impact, the manner in which the jurors
heard the Recordings significantly added to the unfair prejudice.2
3. It also makes no difference whether the district judge “observed
the jurors’ demeanors throughout the trial” for signs of unfair prejudice.
Gov’t Br. 79-80. The judge acknowledged it was “unpleasant for the
jury” to hear the Recordings. Mem. 27, R.701, PageID#19587. And even
the best reader of body language would struggle to be confident that the
jurors were not “unduly affected by the evidence afterwards.” Id. This
argument also ignores that the jurors could have recalled and reacted to
the Recordings outside of court.
There are also strong, science-based reasons to conclude that the
Recordings had impacts in ways even the jurors themselves would not
realize. Consistent with the research cited in Hazelwood’s opening brief
(at 34–35), Justice Breyer recently noted how “[s]cientific evidence
2
Not only did the instructions here make the prejudice worse, even
proper limiting instructions are “not a sure-fire panacea for the
prejudice resulting from needless admission of such evidence.” United
States v. Clay, 667 F.3d 689, 696 (6th Cir. 2012) (internal quotation
marks omitted). Empirical studies have shown that “prior bad acts
influence[] factfinders even when the court gives a limiting instruction.”
Id. at 697.
15

suggests that certain highly vulgar words have a physiological and
emotional impact that makes them different in kind from most other
words.” Iancu v. Brunetti, 139 S. Ct. 2294, 2307 (2019) (Breyer, J.,
concurring) (citing Melissa Mohr, Holy Sh*t: A Brief History of
Swearing 252 (2013) (noting the “emotional impact” of certain profane
words that “excite the lower-brain circuitry responsible for emotion,”
resulting in “electrical impulses that can be measured in the skin”)); see
also T. Jay et al., Recalling Taboo and Nontaboo Words, American
Journal of Psychology, Spring 2008, v. 121 at 84–85, 91. These words
are recalled more “vivid[ly].” Id. at 83. So even if the judge detected no
outward signs of negative effects on jurors, he could not possibly
know—especially during closed-door deliberations—whether jurors
recalled the Recordings much more vividly than the truly relevant
testimony. See United States v. Stout, 509 F.3d 796, 801 (6th Cir. 2007)
(observing that the “reverberating clang” of inflammatory, prejudicial
evidence “drown[s] out all weaker sounds,” particularly if “more lurid
and frankly more interesting than the evidence surrounding the actual
charges”) (citations omitted).
16

4. The jury’s acquittal of Hazelwood on one count only highlights
that the evidence here was not strong enough to render the error
harmless. See infra pp. 26–31. The government instead hails the split
verdict as proof the jury “was driven by reason, not emotion,” but for
this it relies on a civil case against a corporation where the evidence
was far less inflammatory. Gov’t Br. 80 (citing Paschal v. Flagstar
Bank, 295 F.3d 565, 581 (6th Cir. 2002) (use of racial testing in lending
policies)). In criminal cases, though, the Supreme Court has long
cautioned against trying to squeeze “reason” out of inconsistent
verdicts. See United States v. Powell, 469 U.S. 57, 64–65 (1984)
(recognizing that “mistake, compromise, or lenity” can account for
inconsistent verdicts). Hazelwood’s verdicts were inconsistent: counts 8
and 10 were based on two emails sent the same day in the same thread
discussing the exact same alleged fraud (A/B pricing), yet the jury
convicted on one count and acquitted on the other. A jury that was
prejudiced by the Recordings, then was reminded of their “terrible”
nature in closing arguments, Tr.237:19, R.511, PageID#12871; Tr.17:5–
13, R.512, PageID#12907 (arguments by co-defendants), and ultimately
17

was “uncertain of guilt,” might very well have been swayed that “a bad
person deserves punishment” for something. Old Chief, 519 U.S. at 181.
II. THE RECORDINGS WERE ALSO INADMISSIBLE UNDER RULES 401,

404, AND 405.
Argument I assumes the Recordings would have been admissible if
they had not been so unfairly prejudicial. But even aside from Rule 403,
reversal is required because the Recordings failed under each Rule that
the district court invoked to support their admissibility.
A. Rule 401 Is Not a Standalone Basis for the Recordings’

Admissibility.
The government does not even try to defend the district court’s use
of Rule 401 as a standalone basis for admitting the Recordings. As
Hazelwood’s opening brief explained at 39–41, even assuming the
Recordings were relevant under Rule 401, they must also meet Rule
404’s and Rule 405’s requirements for admitting extrinsic evidence of
specific instances of conduct. The next two subsections explain why the
Recordings fail to meet the requirements of those Rules.
18

B. The Government’s theory of admissibility under Rule

404(b) is contrary to this Court’s published opinions.
The government’s arguments sharply deviate from this Court’s
framework for admitting other-acts evidence under Rule 404(b),
especially the bar on a jury’s use of such evidence to infer a propensity
for engaging in bad conduct.
1. The Recordings violate Rule 404(b)’s bar on using other-acts
evidence to show propensity. The government responded to the
supposed defense of “It would be foolish to risk being caught committing
fraud” with “but you were willing to take risks by using racist and
sexist language, so it’s more likely you would commit fraud.” Under this
reasoning, any executive’s behavior that is unseemly enough to risk
serious damage to his company’s reputation—be it sexual misconduct,
using drugs, or even expressing highly unpopular views—would be fair
game for the same “dumb enough to engage in X means dumb enough to
commit fraud” argument. Many powerful people have done or said
things that reflect poorly on them and could harm their business
interests. The government’s improper propensity reasoning
countenances no limiting principle: virtually any defendant, in virtually
any case where the defense notes the reputational risks of illegal
19

conduct, could be subject to virtually unfettered other-acts evidence on
the same theory.3
2. Even had there been a non-propensity basis for admitting the
Recordings, the district court did not “‘clearly, simply, and correctly’
instruct the jury” to use the Recordings for such a purpose.
Merriweather, 78 F.3d at 1077. If anything, the district court’s jury
instruction confirmed that jurors could find that the Recordings showed
Hazelwood’s propensity for bad or risky conduct.
The court instructed the jury to use the Recordings to consider
“whether,” in his “roles” as businessman and company president,
3
Examples abound of bad or unpopular personal behavior damaging
a company. See, e.g., John Bowden, Tesla Stock Falls as Elon Musk
Smokes Marijuana on Video, The Hill (Sept. 7, 2018),
https://thehill.com/policy/finance/405645-tesla-stock-falls-as-ceo-
appears-to-smoke-marijuana-on-video; Todd Spangler, CBS Stock
Tumbles on Reports of Sexual-Harassment Allegations Against CEO
Leslie Moonves, Variety (July 27, 2018),
https://variety.com/2018/biz/news/cbs-stock-tumbles-on-sexual-
harassment-allegations-against-ceo-leslie-moonves-1202888222/; Josh
Barro, The Trump Boycotts Pose a Grave Danger to the Equinox and
SoulCycle Businesses, N.Y. Magazine (Aug. 9, 2019),
http://nymag.com/intelligencer/2019/08/trump-boycotts-are-a-real-
threat-to-equinox-and-soulcycle.html (describing “outrage and boycott
threats over a high-dollar fundraiser for Donald Trump hosted by
Stephen Ross, chairman of the Related Companies, the parent of
SoulCycle and Equinox Fitness”).
20

“Hazelwood would engage in conduct that ran the risk of putting the
company in jeopardy or risked everything coming down if that conduct
was discovered.” Tr.26:12–14, R.424, PageID#10422. That phrasing told
the jury to consider propensity—not motive, intent, or any other
permissible purpose—because it invited the jury to find that
Hazelwood’s use of racist and sexist dialogue with co-workers made it
more likely he “would engage” in other bad conduct that entailed
devastating risks, such as fraud. That “propensity line of reasoning” is
precisely what Rule 404(b) is designed to prohibit. See United States v.
Asher, 910 F.3d 854, 862 (6th Cir. 2018).
3. The government claims that “[p]roving motive” was a proper
“specific purpose” under Rule 404(b), Gov’t Br. 71–72, but that was not
the government’s purpose in playing the Recordings. The Court’s
instructions did not even mention “motive,” because the Recordings
bear not one bit on why Hazelwood would commit fraud. The
government thus used other evidence to argue motive. See infra pp. 36–
37 (government’s use of Darren Seay testimony to inflate the fraud
amount and Hazelwood’s possible gain). The Recordings, on the other
hand, reveal no motivation, nor could they rebut a so-called “lack-of-
21

motive” defense, because they fail to show how it would have been
“smart” to commit fraud or why Hazelwood would want to harm Pilot or
its customers.
4. The government relies on non-precedential and out-of-circuit Rule
404(b) cases to defend the ruling below, but none is anything like this
one.
In United States v. Mireles, 442 F. App’x 988, 995 (5th Cir. 2011), a
federal employee prosecuted for harboring illegal aliens argued that he
valued his job too much to do something that would risk being fired.
The government countered with a supervisor’s testimony that the
defendant was only “doing the minimum work.” The court of appeals
affirmed, but only after noting that, because the supervisor “did not
testify that” the defendant “broke [work] rules” or “performed any
illegal activities while at work,” the testimony “without more, [wa]s not
evidence of Mireles’s character for rule-breaking.” Id. at 994–95. Here,
the government did invite the jury to judge Hazelwood’s character for
bad conduct; Hazelwood never argued he would avoid all conduct that
might get him fired; and evidence that a defendant was “doing the
22

minimum work” is nowhere near as prejudicial as what the jury heard
here.
In United States v. Patel, 485 F. App’x 702, 717 (5th Cir. 2012), the
defendant argued that allegations of health care fraud were
incompatible with his “compassion for his patients.” The government
countered with proof the defendant had “called patients derogatory
names, silenced complaints as to [their] safety, and engaged in unsafe
medical practices.” Id. at 716. Here, by contrast, nothing on the
Recordings was directed at customers or shows that Hazelwood’s care
for his customers was less than genuine. Mosher, who was present
during the Recordings, instead agreed “absolutely” that Hazelwood’s
empathy for the customers of Pilot’s truck stops was authentic. Tr.7:2,
R.375, PageID#10001.
The Fourth Circuit’s decisions in United States v. Uzenski, 434 F.3d
690, 711 (4th Cir. 2006), and United States v. Johnson, 634 F.2d 735,
737 (4th Cir. 1980), are even further afield. That court reasoned, in a
way this Court never has, that a defendant “forfeit[s]” Rule 404(b)’s bar
on propensity evidence if he “depict[s] himself” as someone “whose
essential philosophy and habitual conduct in life is completely at odds
23

with the possession of a state of mind requisite to guilt of the offense
charged.” Uzenski, 434 F.3d at 711 (quoting Johnson, 634 F.2d at 737).
The Court need not decide whether to adopt that counter-textual
forfeiture theory, because the government has not shown—or even
argued—that Hazelwood put his “essential philosophy and habitual
conduct in life” at issue. And even if Hazelwood had, the Recordings
would not rebut that assertion for the reasons already stated.
C. The Recordings Were Also Inadmissible Under Rules

404(a) and Rule 405.
The government all but concedes that, if the Recordings were
admitted to rebut a supposed character trait under Rule 404(a), the
trial court erred in letting the jury hear them, because Rule 405 bars
the use of extrinsic evidence (the Recordings), as opposed to testimony
about the trait.
The government itself recognized in its district court motion that
Rule 405 allows inquiry into prior acts only through testimony, not by
introducing extrinsic evidence. See Fed. R. Evid. 405; United States v.
Reese, 568 F.2d 1246, 1251 (6th Cir. 1977); Motion Mem. 1, R.372,
PageID#9735 (government motion arguing that Rule 405 allowed it to
examine Mosher about the racist and sexist language on redirect). The
24

district court agreed in its original oral ruling. Tr.181:13–15, R.374,
PageID#9969 (“That means the prosecution is prohibited from
introducing extrinsic evidence to prove the specific instance; it is limited
to whatever the witness says.”). Yet after the Recordings had already
been played under a Rule 401 theory, the court resuscitated the Rule
404(a) rationale without ever addressing this glaring shortcoming.
Mem. 4–6, R.455, PageID#11698–700.
It is therefore disingenuous, at best, for the government now to
assert that the district court “could reasonably have concluded,” Gov’t
Br. 75, that playing the Recordings was “more efficient and less
prejudicial” than testimony would have been, id. The district court
made no such ruling because it originally rejected the government’s
Rule 404(a) theory. And no defendant would possibly prefer exposing
the jury to several minutes of audio recordings with extremely vile
language in his own voice instead of having someone questioned about
his character traits.
The government’s final defense is that, under the doctrine of
“curative admissibility,” the Recordings “remed[ied] the unfair
prejudice” of allowing Hazelwood to play a “Mark the Driver” video to
25

the jury. Gov’t Br. 75–76. But, as the government’s own brief states,
curative admissibility applies only when “the introduction of
inadmissible evidence by one party opens the door” for rebuttal. Id. at
76 (citation omitted); see also United States v. Hart, 70 F.3d 854, 859
n.6 (6th Cir. 1995) (means for rebutting “prejudicial evidence that was
erroneously admitted”). The government has not contested the video’s
admissibility—either at trial or on appeal. There was no error to cure.
None of the Rules on which the district court relied support the
Recordings’ admission. Thus, admitting them was error even apart from
the Rule 403 violation.
III. THE ADMISSION OF THE RECORDINGS IS REVERSIBLE ERROR

BECAUSE EVIDENCE OF HAZELWOOD’S GUILT WAS NOT
OVERWHELMING.
The government argues that any error was rendered harmless by
“[a]mple evidence proving defendants’ guilt.” Gov’t Br. 124. That is the
wrong test. “Ample” does not suffice; instead, for an error to be
harmless “the record evidence of guilt” must be “overwhelming,
eliminating any fair assurance that the conviction was substantially
swayed by the error.” See Clay, 667 F.3d at 700. As the government did
in Clay, it confuses the inapt question of “whether there was sufficient
26

evidence on which the defendant could have been convicted without the
evidence complained of,” with the proper question of “whether there is a
reasonable possibility that the evidence complained of might have
contributed to the conviction.” Id. (cleaned up).
The government showed that numerous Pilot employees defrauded a
small percentage of Pilot’s customers to garner sales commissions. But
proof that Hazelwood was even aware of that fraud was
underwhelming. Hazelwood had myriad responsibilities covering all
facets of Pilot’s multi-billion-dollar operations, and the fraud affected
only a tiny portion of Pilot’s revenues and very few customers, making
it unlikely that a busy company executive would discover it. Br. 49. And
the nature of the fraud made Hazelwood’s awareness even more
unlikely: “manual rebates” were a legitimate sales tool, and Pilot could
legally change discounts when, for example, the customer failed to buy
the minimum agreed-upon fuel amount. So, there being no reason for
Hazelwood to scrutinize the pricing contracts and corresponding
invoices, many of the fraudulent activities appeared legitimate.
Tr.39:2–14, R.356, PageID#8951.
Nor did the government offer a convincing motive; during the five
27

years in question, Hazelwood earned $80 million as company president
and—in contrast to those who pleaded guilty—the fraud only nominally
affected his compensation. Br. 47. At bottom, the government’s case
came down to a single cooperating witness claiming Hazelwood was
aware of the fraud, plus a small handful of emails and trip reports that
the government did not prove Hazelwood read.
“The government bears the burden to prove that any error was
harmless,” see United States v. Newsom, 452 F.3d 593, 602 (6th Cir.
2006), yet it merely recycles the meritless arguments that Hazelwood’s
brief already refuted. The government made those same arguments in
earlier filings defending the convictions. Gov’t Opp. to Mot. for New
Trial 3–21, R.578, PageID#14927–45; Gov’t Opp. to Mot. for Release
Pending Appeal 5 n.2, R.705, PageID#19686; Gov’t Opp. to Mot. for
Release Pending Appeal 18–20, 6th Cir. D.E. 18. Hazelwood’s opening
brief refuted every point, but the government simply ignores it all,
instead merely repeating the earlier assertions in bullet-form. Br. 48–
56.
The government’s first item is trip reports. Gov’t Br. 125. Of those
thousands of reports, though, the record showed that Hazelwood read
28

and responded to only five, and Hazelwood’s brief explained the
weakness in the government’s reliance on each. Br. 53–54. The
government now describes only two of them, and then ignores
Hazelwood’s points that the manual rebates mentioned in one were a
legitimate sales tool, and that the fraud reference in the other was
veiled, buried among descriptions of 22 legitimate customer
interactions, and not even mentioned in Hazelwood’s reply email. Br.
54. The government also shifts to describing other reports without
proving that Hazelwood read them; indeed, he never commented or
followed up on those reports or the points they covered. Gov’t Br. 19,
126 (referring to GX 1101, 611, 612, 615).4 In seeking a contrary
inference, the government again tries to shirk its burden to show that
guilt was overwhelming by invoking the test for Rule 29 motions. Clay,
667 F.3d at 700.
The government also seeks an inference of guilt because the
fraudsters were Hazelwood’s subordinates, Gov’t Br. 125, but all of
4
There is even more reason to doubt that Hazelwood, as a busy
executive, read these reports. Forensic analysis, which the government
and trial counsel failed to perform, now shows that Hazelwood almost
never opened these reports when he received them electronically. Br.
77–78.
29

them learned the scheme from a supervisor or colleague other than
Hazelwood. Br. 51. The government’s next two bullets reference
Mosher’s testimony about supposedly “discuss[ing] whether to cheat
customers” and sharing manual rebate spreadsheets with Hazelwood.
Gov’t Br. 125. But Mosher admitted that, although the co-conspirators’
code for fraud was manual rebates, Hazelwood would have recognized
the term as a legitimate Pilot sales tool. Br. 50–51. In fact, over the
government’s objection, one of its witnesses agreed to a list of multiple
legitimate “reasons why it would make sense to do a manual rebate
discount.” Tr.126–30, R.445, PageID#11424–29. In recorded
conversations, Mosher consistently talked about “manual” rebates, not
“fraud” or “cheating.” Br. 50–51. Kevin Clark’s testimony, Gov’t Br. 126,
suffers from the same deficiency, Br. 51–52.
Other points the government makes were already refuted in
Hazelwood’s brief. Compare Gov’t Br. 126–27 (uses of term “manual”
rebates with new employee, in a training session by Mosher, and at a
staff meeting), with Br. 12–13, 50–51 (manual rebates were a legitimate
sales tool); compare Gov’t Br. 127 (A/B pricing), with Br. 13–14, 54
(tapes describe only differential pricing); compare Gov’t Br. 126
30

(referencing GX 902 “better of” deal), with Br. 11–12 (Hazelwood’s reply
email shows he had not read earlier parts of the chain containing fraud
references).
That leaves a single instance of Hazelwood saying he would “take
care of” an employee’s failure to deliver a promised discount to Smith
Transport. Gov’t Br. 126. This too was very weak evidence of complicity
in wrongdoing. The government did not contend that Dan Peyton, the
witness it used to prove this incident, was culpable, and Peyton knew
just as much as Hazelwood. Tr.111–15, R.445, PageID#11409–13. The
jury was so unpersuaded that the Smith discrepancy resulted from
fraud that it acquitted Karen Mann even though the government
showed she was responsible for the discrepancy in the first place. Id. at
PageID#11413–16.
As for the obstruction conviction, the government concedes that its
proofs were limited to a single witness recounting from memory specific
words used in a phone call, with no corroboration other than records
showing that the phone call occurred. Br. 55.
Because the evidence here was far from overwhelming, reversal is
required.
31

IV. THE DISTRICT COURT ERRED AS A MATTER OF LAW IN ALLOWING

THE GOVERNMENT TO INTRODUCE EXPERT TESTIMONY UNDER THE
RULE GOVERNING LAY OPINIONS.
In defending the opinion testimony of Darren Seay, the
government’s brief is at odds with the trial record and side-steps the
real issue: no matter how Seay got his facts, he also testified based on
specialized knowledge falling within the scope of the expert testimony
rule. This error, which inflated the fraud’s magnitude at least four-fold,
also requires reversal.
A. Darren Seay’s testimony failed Rule 701(c)’s requirement

that it not be based on technical or otherwise specialized
knowledge.
A lay witness may offer opinion testimony only if it meets each of
three independent requirements: it must be “(a) rationally based on the
witness’s perception; (b) helpful to clearly understanding the witness’s
testimony or to determining a fact in issue; and (c) not based on
scientific, technical, or other specialized knowledge within the scope of
Rule 702.” Fed. R. Evid. 701. Seay’s testimony failed the third
requirement.
The government argues that Seay merely “engaged in a process of
reasoning familiar in everyday life” in determining, and then testifying
to, the precise amounts of the trucking companies’ fraud losses here.
32

Gov’t Br. 99. That is incorrect. Seay managed Pilot’s “business
intelligence” and “data science” group, supervising a team that
“typically applie[d] complex calculations” to data. Tr.188–89, R.429,
PageID#10848–49. After the FBI raid, Seay used these skills to oversee
the development of two accounting tools that Pilot employees used to
determine customer fraud loss, Br. 58, including creation of a
“specialized” computer program that typical Excel users would be
unable to understand “without training.” Tr.37:17–24, R.429,
PageID#11056. Seay used this same specialized knowledge to create the
summary charts that the government introduced at trial. He therefore
based his opinions on the type of specialized knowledge to which Rule
702 applies. United States v. Ganier, 468 F.3d 920, 926 (6th Cir. 2006)
(explaining that while popular software programs “may be as commonly
used as home medical thermometers,” tests using less common forensic
software “are more akin to specialized medical tests run by physicians”).
The third requirement in Rule 701 expressly forbids this. By
admitting Seay’s testimony and exhibits in which he opined on loss
magnitude, “the reliability requirements set forth in Rule 702” for
expert opinion were “evaded through the simple expedient of proffering
33

an expert in lay witness clothing.” Fed. R. Evid. 701, advisory
committee’s note to 2000 amendment. Seay should have been prohibited
from testifying as a lay witness to conclusions reached based on his
specialized knowledge.
The government largely focuses on the first requirement: that lay
opinion testimony must be rationally based on the witness’ perception.
It argues that Seay “was not an ‘expert’ within the meaning of Rule 702
because his testimony was limited to opinions based on his own
perceptions, which were necessarily informed by particularized
knowledge he possessed as a result of his employment at Pilot.” Gov’t
Br. 98. Even if Seay’s “perceptions” and “particularized knowledge”
were gained while a Pilot employee, the opinions to which he testified
were also formed based on his use of technical and otherwise specialized
knowledge to create and apply sophisticated accounting tools that
calculated fraud amounts.
The government again misses the point by asking how it could “take
specialized knowledge to understand that a customer will incur
financial harm if it does not receive the discount it was promised.” Gov’t
Br. 99. Three days of testimony from a specialist like Seay would have
34

been unnecessary if that was its simple purpose. The government’s own
brief describes fuel pricing as opaque enough that ordinary people—
even well-educated trucking company managers—cannot readily
determine the per-gallon wholesale cost of fuel at any given time and
place. See, e.g., Gov’t Br. 5 n.3. Thus, Seay’s expertise was needed to
calculate customer fraud loss, making it anything but “the same type of
evidence” as the testimony of “other lay witnesses.” Gov’t Br. 99. He
employed his specialized knowledge to create and apply new tools that
were so sophisticated he had to run a “complex calculation” just to
verify their integrity. Tr.194:22–195:9, R.429, PageID#10854–55.
Unlike the other trial testimony, Seay’s was based on specialized
knowledge. And unlike the other witnesses, Seay was presented as
uniquely qualified to assign a dollar amount to the fraud. Before
invoking such special status, the government needed to qualify Seay as
an expert, which it expressly gave up trying to do. Br. 59 (citing record).
Finally, the government argues that in United States v. Kerley, 784
F.3d 327 (6th Cir. 2015), this Court allowed a lay witness to testify to
the use of “specialized tools” and “specialized systems” of data analysis.
See Gov’t Br. 101–02. But Kerley did no such thing. Rather, it held that
35

witnesses properly testified, based on their general knowledge of their
employer’s business practices, to “whether [certain] lenders would have
approved” loans in certain circumstances. Id. at 340. Unlike Seay’s
testimony, which required the employment of complex data-analytics
tools, those witnesses needed no tools, no science, and no specialized
systems to discuss their knowledge of the standards their employer
used in determining whether to lend funds.
B. The district court’s error in admitting Seay’s testimony

was prejudicial.
Not only was this a close case, see supra pp. 26–31, this error
produced substantial prejudice. Through Seay’s testimony, the jurors
received an inflated picture of the scheme’s magnitude—by at least a
factor of four—making it more likely someone in Hazelwood’s position
must have known about it.5
The government compounded this prejudice by then using Seay’s
inaccurate testimony to argue an alleged financial motive for
Hazelwood to engage in the fraud: “$56 million at 3 1/2 percent, that’s
5
The initial presentence report attributed half of the fraud conduct
to Hazelwood. PSR, R.597 (sealed), ¶ 48 ($23 million out of $56 million).
But by the time of sentencing, the government stipulated that
Hazelwood’s half of the overall loss was no more than $5 million, Br.
20—a 75% reduction.
36

1.96 million. . . . Motive.” Tr.54:20–22, R.513, PageID#13161.6 The
government cannot avoid this prejudicial impact by arguing that the
$56 million figure came out in cross-examination. Gov’t Br. 106. The
jury would have heard none of Seay’s opinions about the extent of the
fraud, and the government would have been unable to invoke the $56
million figure repeatedly in its closing arguments, if not for this error.
Reversal is required.
V. REMAND IS REQUIRED FOR AN EVIDENTIARY HEARING ON

HAZELWOOD’S NEW TRIAL MOTION.
The parties agree that the most important factor in assessing
excusable neglect for Hazelwood’s late Rule 33 motion is the “reason for
the delay.” Gov’t Br. 136. Under this Court’s opinion in United States v.
Munoz, 605 F.3d 359, 371 (6th Cir. 2010), Hazelwood had “a valid
reason for the delay” because trial counsel continued to represent him
“during the window for timely filing a Rule 33 motion,” and his
replacement counsel acted promptly in filing a delayed new trial motion
6
Making that prejudice even worse, the government's motive
argument was based on 3.5% of alleged revenue gain when Hazelwood's
compensation package netted him 3.5% of after-tax net earnings.
Hazelwood Motion for Variance, R.671 at 7, PageID#18375.
37

based on ineffective assistance of trial counsel. Because that is all
Munoz required to establish a valid reason for delay, the district court
erred.
The government tries to distinguish Munoz, asserting that
Hazelwood’s ineffective assistance claims displayed a “blatant
weakness” in comparison to the ineffectiveness claims “discussed in
Munoz—e.g., where an attorney ignored instructions to file a notice of
appeal or made himself wholly inaccessible to a client.” Gov’t Br. 136.
The government misreads both the law and the facts of Munoz.
First, the only criteria that Munoz set as a “valid reason” for
excusable neglect are the two mentioned above: trial counsel continued
to represent a defendant when the deadline for a new trial motion
passed, and new counsel thereafter promptly filed a delayed motion
alleging ineffective assistance of trial counsel. Id. at 371. Munoz
addressed the merits of the ineffective assistance claims only after
finding excusable neglect.
Second, the trial attorney’s performance in Munoz did not involve
ignoring instructions to file a notice of appeal or making himself wholly
inaccessible to a client. Those were claims in other cases. See id. at 369–
38

70. Instead, Munoz’s claims were of the same nature as those here,
including: failing to investigate the availability of other possible
evidence; failing to emphasize a particular point in questioning a
government witness; and failing to introduce impeachment evidence. Id.
at 377–82. And, besides, neither the district court nor the government
asserted below that Hazelwood’s claims of ineffectiveness were “clearly
frivolous,” which is the only basis Munoz offers for summarily denying
ineffectiveness claims that were filed late due to trial counsel’s
“continuing representation” of the defendant. 605 F.3d at 371, 373 n.8.
The government also insists that no evidentiary hearing was
necessary because Hazelwood failed to “proffer some evidence that
counsel was, in fact, ineffective.” Gov’t Br. 139. But Hazelwood
supported his ineffectiveness claims with affidavits, declarations, and
forensic analyses, see Br. 74–79, after which the district court candidly
acknowledged that to “properly address many, if not all, of the claims
raised, the Court would need to take evidence.” Mem. 23, R.701,
PageID#19583. The district court then erroneously relied on speculation
about trial counsel’s performance, rather than taking evidence. Br. 76.
That same speculative reasoning infects the government’s assertion
39

that all of trial counsel’s decisions were “inherently strategic” and thus
immune from attack. Gov’t Br. 135 n.35, 137 n.37. The government
merely assumes—because the court took no evidence—that trial counsel
made conscious, informed decisions. As this Court has explained, “the
proper inquiry asks ‘not whether counsel’s decisions were strategic, but
whether they were reasonable,’” and any decision based on an
inadequate investigation cannot “constitute a reasonable ‘strategic
choice.’” United States v. Arny, 831 F.3d 725, 732 (6th Cir. 2016)
(emphasis added). Without any evidence showing that trial counsel
made informed decisions after reasonably investigating each topic—
assuming counsel even thought about the topic at all—it matters not
whether a decision was “inherently strategic.”7
Finally, the government repeats the district court’s assertion that it
7
For example, the record is silent on whether trial counsel
(i) realized that Hazelwood was not receiving trip reports on a regular
basis or that contracts in counsel’s possession gave Pilot the right to
change discounts unilaterally and without notice; (ii) looked into
performing a forensic analysis that would have shown Hazelwood
accessed only a very few trip reports—all of them innocuous—when
they were solely available via a Dropbox app; or (iii) tasked anyone on
his team with checking the accuracy of transcripts for recordings that
were the primary basis for a count of conviction and contained
significant errors. Br. 77–79.
40

did Hazelwood a favor by dismissing the new trial motion without
taking evidence. See Gov’t Br. 138; Mem. 23, R.701, PageID#19583
(court “expect[s]” that litigating these issues was “not in Defendant’s
interest”). But, apropos of strategic choices, the court had no authority
to decide for Hazelwood that litigating his ineffectiveness claims was
against his interests. “Our system of laws generally presumes that the
criminal defendant, after being fully informed, knows his own best
interests and does not need them dictated by the State. Any other
approach is unworthy of a free people.” Martinez v. Court of Appeal of
California, Fourth Appellate Dist., 528 U.S. 152, 165 (2000) (Scalia, J.,
concurring in the judgment). The court thus erred in making this a
basis for its ruling. See Weaver v. Massachusetts, 137 S. Ct. 1899, 1908
(2017) (noting the “fundamental legal principle that a defendant must
be allowed to make his own choices about the proper way to protect his
own liberty”).
At a minimum, the court abused its discretion by using a supposed
lack of merit to deny Hazelwood’s motion without first holding an
evidentiary hearing. Remand is warranted if the convictions are not
overturned.
41

VI. REMAND FOR RESENTENCING IS REQUIRED IN THE ALTERNATIVE.
The government does not dispute that resentencing is required if a
district court “did not understand its discretion” to depart. Br. 80–81
(quoting caselaw). The government instead argues that “[a]t most,” the
error Hazelwood identified—grafting an extra-textual “reasonable
person” test onto the departure provision at issue—was just one of two
reasons the court gave for not departing. Gov’t Br. 143–44. But
Hazelwood already explained in his opening brief that the district
court’s other reason “is also erroneous.” Br. 85 (documenting the court’s
error in believing that the expert’s “analysis relied solely on averages”).
Because the government ignores that flaw, resentencing is required.
Hazelwood sought a downward departure under Application Note
20(C) of Section 2B1.1 because the aggregate loss amount was
“substantial but diffuse, with relatively small loss amounts suffered by
a relatively large number of victims.” Id.8 The government concedes
that, contrary to this text, the court believed the Commission was
referring only to “losses that a reasonable person would understand to
be serious.” Gov’t Br. 143 (quoting court). There also is no dispute that
8
This Note is now numbered 21(C).
42

because the court applied this “reasonable person” test to determine
whether losses were “relatively small,” it did not consider each victim’s
“financial position.” Br. 83–84 (quoting court). Thus, the government
does not refute that the court committed legal error by interpreting the
Note to require something other than a case-specific approach to
whether losses were significant to victims.
The government instead asks the Court to ignore this error because
the court also “considered” “whether the loss was subjectively
substantial in the eyes of trucking-company customers.” Gov’t Br. 144.
But Hazelwood already refuted that other rationale in three ways.
First, the court erroneously believed that Benjamin Wilner’s expert
conclusions of subjectively de minimis loss relied only on averages
when, in fact, Wilner used customer-specific numbers in applying his
four financial metrics. Br. 85. Second, under the correct
“preponderance” standard—rather than an erroneous “conclusive proof”
test—not a single customer incurred significant harm. Id. at 85–86. And
third, the district court overstated the seriousness of the offense for at
least 95% of the loss amount. Id. at 86. The government ignores all of
this, instead simply repeating the district court’s mistakes. Gov’t Br.
43

142 (reciting court’s erroneous conclusion about “dependence on
averages”).
If the convictions are affirmed, Hazelwood should be resentenced.
VII. JUDICIAL REASSIGNMENT IS WARRANTED IN THIS CASE.
The record repeatedly contradicts the government’s efforts to spin
the facts on judicial reassignment.
The principal reason to reassign is the judge’s “strong views,”
untethered to evidence, that “Hazelwood was the driving force behind
the scheme.” Br. 88–89. The government’s sole retort is testimony from
one witness (Mosher) who said nothing about Hazelwood
“commandeer[ing] Pilot’s corporate infrastructure to bring the scheme
to life.” Br. 89 (judge claims he has “never seen another instance” of
“[t]his degree of commandeering”). Mosher testified that someone else
(Freeman) initiated the fraud, see Br. 90, and Mosher admitted
committing manual rebate fraud himself before joining Pilot, Tr.12,
R.361, PageID#9297.
The government makes the same mistake when defending the
judge’s invention of a young employee pulled into the fraud scheme
because Hazelwood, a supposed “role model,” created “peer pressure.”
44

See Br. 90. No participant in the government’s “composite”—Lexie
Holden, Katy Bibee, and Holly Radford—implicated Hazelwood in the
fraud at all. As with Mosher, other persons directed their involvement.
See, e.g., Tr.97:2–98:9, R.522, PageID#13884–85 (Bibee); Tr.177:1–23,
R.354, PageID#8833 (Radford); Tr.201:12–202:16, R.445,
PageID#11499–00 (Holden). The government even commits the judge’s
error of using positive traits to support negative accusations. Compare
Br. 91 (judge criticizes Hazelwood’s need “to feed his ego”), with Gov’t
Br. 152–53 (government defends that criticism by pointing to
Hazelwood’s “great ideas” as a “lead visionary”).
The district judge’s strong views against Hazelwood were apparent
long before sentencing, as evidenced by the ever-changing reasons for
admitting highly prejudicial Recordings. See, e.g., United States v.
Robin, 553 F.2d 8, 11 (2d Cir. 1977) (citing importance of preserving the
appearance of fairness through reassignment in such a context). Then,
at sentencing, the district judge invoked the Bernie Madoff prosecution
at great length to downplay Hazelwood’s lifetime of good works. Br. 91–
92. These “speculative musings” and “unsupported assertions” warrant
reassignment. See United States v. Cota-Luna, 891 F.3d 639, 649 (6th
45

Cir. 2018).
Even now, the judge refuses modest adjustments to conditions of the
“release” that this Court ordered pending appeal. Hazelwood sought the
chance—without objection from the government or the probation
department—to leave his home for three hours a day, three days a
week, with a custodian, to attend church and get needed outdoor
exercise. Even though Hazelwood has complied with each of the court’s
conditions when previously granted limited permission to leave his
home for special purposes (such as attending hearings or an annual
visit to his daughter’s grave), the judge refused, stating that Hazelwood
“is free to engage in any form of worship he may desire from his home”
including by “hosting bible studies or church services.” R.891 at 2.9
The appearance of justice alone outweighs judicial familiarity with
the case, especially where (as the ineffective assistance claims show) a
new trial will feature different evidence and different issues.
9
The full chronology of this effort to obtain that minor change to
release conditions is found at R.876, 880, 889, 890, 891. Only Hazelwood
has been subjected to home incarceration despite meeting the conditions
for release pending appeal.
46

CONCLUSION
Hazelwood is entitled to a new trial, an evidentiary hearing on his
new trial motion, or resentencing, all before a different judge.
Dated: September 4, 2019 Respectfully submitted,
/s/ Shon Hopwood
Shon Hopwood
Kyle Singhal
LAW OFFICE OF
SHON HOPWOOD P.L.L.C.
3106 15th St., N.E.
Washington, D.C. 20017
Telephone: (202) 662-9559
David Debold
Megan B. Kiernan
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Ave., N.W.
Telephone: (202) 955-8551
ddebold@gibsondunn.com
Counsel for
Appellant Mark Hazelwood
47

CERTIFICATE OF COMPLIANCE WITH RULE 32(A)
This reply brief complies with the type-volume limitation of Federal
Rule of Appellate Procedure 32(a)(7)(B)(ii), as modified by this Court’s
Order, because it contains 8,994 words, excluding the exempted
portions of the brief.
This brief complies with the typeface requirements of Federal Rule
of Appellate Procedure 32(a)(5) and the type style requirements of Rule
32(a)(6) because this brief has been prepared in a proportionally spaced
typeface using Microsoft Word 2010 in New Century Schoolbook, Size
14.
Dated: September 4, 2019 /s/ Shon Hopwood
Shon Hopwood
LAW OFFICE OF
3106 15th St., N.E.
Telephone: (202) 662-9559
Counsel for
48

CERTIFICATE OF SERVICE
I hereby certify that on September 4, 2019, I electronically filed the
foregoing Reply Brief. Notice of this filing was sent by operation of the
Court’s electronic filing system to all parties indicated on the electronic
filing receipt.
Respectfully submitted,
/s/ Shon Hopwood
Shon Hopwood
LAW OFFICE OF
3106 15th St., N.E.
Telephone: (202) 662-9559
Counsel for
49

Mark Hazelwood Request For New Judge and New Trial Sept. 4th, 2019 Appeal 53-Pages

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Case: 18-6023 Document: 67 Filed: 09/04/2019 Page: 1

UNITED STATES COURT OF APPEALS

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

REPLY BRIEF OF APPELLANT

Shon Hopwood David Debold

Counsel for Appellant Mark Hazelwood

VI. Remand for Resentencing Is Required In the

Martinez v. Court of Appeal of California, Fourth Appellate Dist.,

Robinson v. Runyon, 149 F.3d 507 (6th Cir. 1998) ................................. 13

United States v. Hart, 70 F.3d 854 (6th Cir. 1995) ................................. 26

United States v. Johnson, 27 F.3d 1186 (6th Cir. 1994) ......................... 13

United States v. Powell, 469 U.S. 57 (1984) ............................................ 17

United States v. Robin, 553 F.2d 8 (2d Cir. 1977) .................................. 45

Weaver v. Massachusetts, 137 S. Ct. 1899 (2017) ................................... 41

Fed. R. Evid. 401 ................................................................................ 18, 25

Fed. R. Evid. 403 ...................................................................... 5, 13, 18, 26

Fed. R. Evid. 404 ...............................................................................passim

Fed. R. Evid. 405 ................................................................................ 18, 24

Fed. R. Evid. 701 ................................................................................ 32–34

Fed. R. Evid. 702 ................................................................................ 32–34

John Bowden, Tesla Stock Falls as Elon Musk Smokes Marijuana on

Josh Barro, The Trump Boycotts Pose a Grave Danger to the

Melissa Mohr, Holy Sh*t: A Brief History of Swearing (2013) ............... 16

T. Jay et al., Recalling Taboo and Nontaboo Words, American Journal

Todd Spangler, CBS Stock Tumbles on Reports of Sexual-Harassment

U.S. Sentencing Guidelines § 2B1.1 ........................................................ 42

The government does not seriously dispute how prejudicial it was to

play three audio recordings (the “Recordings”) of a defendant using

of” Hazelwood’s conduct was of “such magnitude” that the Recordings

could have brought down a multi-billion-dollar company. Gov’t Br. 77.1

Thus, the question is whether probative value supported playing them

despite the visceral responses they undoubtedly evoked. While the

answer might be different in a hate-crime prosecution where a

defendant insists he is not a racist, these Recordings had no offsetting

probative value in a prosecution for fraudulent fuel pricing. This error,

in the absence of overwhelming proof of guilt, requires reversal.

“motive” rationale, falls well short.

the content of the Recordings rebutted supposed character traits of

sound business judgment and authentic humanitarian goodwill toward

Evidence disallow extrinsic evidence (here, the Recordings) to rebut

contends that violating those rules by playing the three audio

Recordings with more than eight minutes of extremely offensive

language was somehow fairer to Hazelwood than briefly questioning a

the district court never made.

On appeal, the government adds an argument that it failed to

present at all below: the Recordings rebut a so-called “lack of motive”

never do anything to jeopardize Pilot’s reputation or success,” Gov’t Br.

Recordings show a motive to defraud. Hazelwood’s defense, documented

in hundreds of pages of transcripts, was that he did not learn about a

handful of employees committing penny-ante fraud against a small

number of Pilot’s customers because he was too busy running and

growing Pilot. E.g., Opening Statement, R.520, PageID#13345. And the

cross-examination at issue here was simply a government witness’s

acknowledgment that it would be “dumb” to risk strong customer

relationships by stealing paltry amounts from them. Tr.104:10–11,

No matter how that cross-examination is portrayed, there was no

testimony that the defendant stood to gain despite risk to customer

relations or that the risk of discovery was low. But instead of

responding that the risk-reward calculus here favored fraud, the

government invited the jury to find that Hazelwood engaged in

zero possible reward.

government’s misguided view that it was fair game to introduce

extrinsic evidence of Hazelwood’s alleged propensity (a so-called