Appeal from the United States District Courtfor the Central District of CaliforniaJohn G. Davies, District Judge, PresidingArgued and SubmittedNovember 5, 1998--Pasadena, CaliforniaFiled September 16, 1999Amended October 19, 1999Before: Robert Boochever, Stephen Reinhardt, andPamela Ann Rymer, Circuit Judges.Opinion by Judge Reinhardt;Partial Concurrence and Partial Dissent by Judge Rymer
_____________________________ORDER The slip opinion ("slip op.") filed September 16, 1999 isamended as follows: 1. At slip op. 11726, headnote 3, lines 12-14, delete "The burden of demonstrating that the error was harmless belongs to the government. See O'Neal v. McAninch,
513 U.S. 432
, 444-45 (1995)." Replace with: "The Court has also held that a reviewing habeas court must determine from the record whether an error is harmless, and that where great doubt exists, must hold the error prejudicial. See O'Neal v. McAninch, 513 U.S. 432 (1995)."In addition, Judge Rymer's partial dissent is also amended bydeleting footnote 5 on pp. 11739-40 of the slip op. Renumbersubsequent footnotes.
_____________________________OPINION REINHARDT, Circuit Judge:Most readers of this opinion will be well acquainted withthe activities of Charles Keating, whose corporations, Ameri-can Continental Corporation and Lincoln Savings & Loan,bilked elderly individuals out of millions of dollars of savingsby selling them worthless savings bonds. Keating was prose-cuted in both federal and state court, and sentenced to sub-stantial terms of imprisonment, to be served concurrently. Heultimately spent five years in prison. His federal and state tri-als were both marred, however, by errors which led our courtto reverse his federal conviction1 and a federal district courtto grant his state habeas petition. Following these actions,Keating was released from prison prior to the completion ofhis prison sentences. At the time, only six months remainedbefore he would have become eligible for parole on his statesentence. Keating subsequently pleaded guilty to the federalcharges and, pursuant to a plea agreement, was sentenced totime served.We now consider whether the district court's decisiongranting Keating habeas relief from his state conviction waslegally correct. The decision was based on the ground that thejury instruction defining the offense of securities fraud errone-ously omitted the mens rea element. We affirm the districtcourt's holding that the omission of this essential element ofthe offense violated due process and requires the reversal ofKeating's conviction.I.BACKGROUNDIn 1990, Keating was indicted in California state court forviolating sections 25401 and 25540 of the California Corpora-tions Code, which make it a criminal offense to offer or sella security "by means of any written or oral communicationwhich includes an untrue statement of material fact necessaryin order to make the statements made, in light of the circum-stances under which they were made, not misleading. " Thestate contended, in essence, that the bond sellers were misledby Keating's failure to inform them of American Continen-tal's poor financial condition and the riskiness of the bonds,and that they, in turn, unwittingly misled the bond purchasers.It is undisputed that in 1989, when American Continental'sfinancial circumstances had deteriorated to the point wherethe company was no longer able to make payments on thebonds, it filed for bankruptcy and most of the bond purchaserslost the money they had invested.2Prior to trial, the judge informed the jury that Keating couldbe held criminally responsible either as a direct perpetrator orfor aiding and abetting the offense. Before the parties' closingarguments, however, a dispute erupted over whether a directperpetrator theory of liability would be presented to the jury.The defense requested a jury instruction that, because Keatinghad not personally sold or offered the securities to the pur-chasers, he could only be convicted as an aider and abettor.The prosecution objected, informing the court that it plannedto argue both theories to the jury. Keating renewed his protest,pointing out that he had had no face-to-face contact or directcommunication with the individuals named in the indictment,and the trial judge concurred with his skepticism about thedirect perpetrator theory. The prosecutor countered that adirect perpetrator instruction was "supported in an evidentiarysense" if Keating was viewed as the original source of theoffer and of the misleading omission of information. Theprosecution characterized Keating "as the alter ego for thecorporation" and stated that in its view "the gravaman of theoffense . . . is not so much an actual sale as it is the omissionor misrepresentation aspect of it." This theory identified Keat-ing as the source of the failure to notify anyone of the finan-cial risks of the bonds, a material omission that was ultimatelytransmitted to the bond purchasers, and that was "violative ofthe statute just as much as an actual sale." As the judge's dis-comfort with the prosecution's theory of liability becameincreasingly clear, the prosecution urged one last possibleway to view Keating as a direct perpetrator: [O]ne thing the evidence does demonstrate is that it was the defendant who singly was setting the terms of the offer, interest rates in the offer, maturity dates in the offer and that [American Continental] was promulgating various material in the form of track records, annual reports and the like that were utilized as part of an offer as well for these individuals. And I would state in that regard, the bond seller becomes a communicator of that; but it is the defendant again who is the source of the bond.The judge was not convinced. While acknowledging that"both theories are in a technical sense before the jury," heconcluded that the direct perpetrator theory was inconsistentwith both the wording of the indictment, which charged "acompleted sale" rather than an offer, and the statute underwhich the prosecution had charged Keating. The defendantcontinued to urge the judge to offer the instruction that Keat-ing could only be convicted as an aider and abettor, arguingthat the need for such an instruction was clearly demonstratedby the prosecution's insistence that a direct perpetrator theorywas supported by the evidence. Realizing that if it did notback off of its insistence that a direct perpetrator theory wasviable, the judge would give the instruction proposed by thedefense, the prosecution promised to argue the case onlyunder an aiding and abetting theory.When the defense attorney later renewed his request for aninstruction limiting the basis on which Keating could be con-victed, the judge announced, "I had previously declined to soinstruct because I think the evidence is clear that Mr. Keatingnever actually had any face-to-face contact with any of thebond purchasers. So clearly his only liability can be as anaider and abettor. I think that's already abundantly clear."After closing arguments, which are discussed in greaterdetail later in this opinion, the judge instructed the jury.3Because the content of the jury instructions is of paramountimportance in this case, they are excerpted here: Every person who willfully sells or offers to sell a security in this state by means of any written or oral communication which includes an untrue state- ment of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, is guilty of a violation of sec- tions 25401/25540 of the California Corporations Code. In order to prove such crime, each of the follow- ing elements must be proved: 1. The defendant willfully sold or offered to sell a security in the state of California; 2. By means of any written or oral communication which includes an untrue statement of material fact or omits to state a material fact necessary in order to make the statements made, in light of the circum- stances under which they were made, not mislead- ing. . . . The term "offer" or "offer to sell" includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security or an interest in a security for value. The term "sale" or "sell" includes every contract of sale of, contract to sell, or disposition of, a secur- ity or interest in a security for value. The persons concerned in the commission of a crime who are regarded by laws as principals in the crime thus committed and equally guilty thereof include: 1. Those who directly and actively commit the act constituting the crime, or; 2. Those who aid and abet the commission of the crime.Trial Transcript at 7468-70.The jury was then instructed that, in order to convict Keat-ing under the aiding and abetting theory, it would have to findthat he knew that the bond sellers were making untrue state-ments or omitting material facts and that he intended to facili-tate, encourage or promote these untrue statements oromissions.4Two key facts are apparent from a reading of the instruc-tions. First, the instructions did not limit the jury to an aidingand abetting theory, but outlined two possible bases for Keat-ing's criminal liability and allowed the jury to convict him oneither theory it deemed proven. Second, the instructionsallowed the jury to convict Keating as a direct perpetratorwithout finding that he had any knowledge of the falsity ofthe information that he conveyed or that he was negligent orreckless for failing to know; in other words, with respect tothe direct perpetrator theory, the instructions contained nomens rea requirement. This was consistent with the interpreta-tion that the California Court of Appeals had given the law atthe time. See People v. Baumgart, 267 Cal.Rptr. 534, 540-41,218 Cal.App.3d 1207, 1219-20 (Cal. Ct. App. 1990) (conclud-ing that SS 25401 and 25540 required no criminal intent);People v. Johnson, 262 Cal.Rptr. 366, 369, 213 Cal.App.3d1369, 1375 (Cal. Ct. App. 1989) (same).The jury returned a verdict convicting Keating of seventeenof the eighteen charged counts of sales of securities by meansof false statements or omissions. This general verdict did notspecify whether the jury convicted Keating as a direct perpe-trator or as an aider and abettor.Keating appealed, and his conviction was affirmed by theCalifornia Court of Appeals. The court rejected Keating'sargument that the trial judge had erred by instructing the juryon a direct perpetrator theory for which there was insufficientevidence. It acknowledged that the "[t]he trial court presentedthe case to the jury with instructions that conviction was pos-sible under theories that Keating was either the direct seller ora principal who was aiding and abetting the violation," butreasoned that "[a] reading of these instructions indicates tothis court, as it must have to the jurors, that Keating was beingtried on the theory that he aided and abetted in the sales of the`junk bonds.' " People v. Keating, 19 Cal.Rptr.2d at 916, 920.The court also denied Keating's claim regarding the failure togive the instruction limiting the jury's considerations to theaider and abettor theory, reasoning, "[c]learly, Keating neverpersonally sold any security to any of the individual investors. . . . It is inconceivable that there was any need to give thisinstruction. To have given this instruction would be statingthe obvious." Id. at 920. Finally, the court rejected Keating'sargument that the omission of the mens rea element was anerror, relying on previous decisions by the California Court ofAppeals defining SS 25401 and 25540 as establishing a strictliability offense. See Keating, 19 Cal.Rptr.2d at 917-18.The California Supreme Court initially granted Keating'spetition for review. See People v. Keating, 859 P.2d 673 (Cal.1993). Before it decided his case, however, it decided Peoplev. Simon, 886 P.2d 1271 (1995), in which it held that"knowledge of the falsity or misleading nature of a statementor of the materiality of an omission, or criminal negligence infailing to investigate and discover them" is required to convicta defendant of violating SS 25401 and 25540, overruling theCourt of Appeals decisions that held otherwise. Simon, 886P.2d at 1281, 1290. Then, rather than proceeding with itsreview of the Court of Appeals' rejection of Keating's appeal(a decision based on two cases that the Supreme Court hadnow disavowed), the Supreme Court dismissed Keating'spetition without review as improvidently granted. See Peoplev. Keating, 890 P.2d 1119 (Cal. 1995).A few months after the California Supreme Court dis-missed his petition, Keating filed a petition for habeas reliefin federal district court. The court granted his petition basedon two grounds: that the failure to include a mens rea require-ment in the direct perpetrator instruction eliminated an essen-tial element of the offense from the jury's consideration andtherefore violated due process, and that the omission of thiselement also infected Keating's conviction by allowing thejury to convict him as an aider and abettor without findingthat the direct perpetrator had the requisite criminal intent.Keating v. Hood, 922 F. Supp. 1482, 1486-88, 1492-94 (C.D.Cal. 1996).5 The state appealed this decision, and on January15, 1998 this Court dismissed Keating's petition without prej-udice because of his failure to exhaust his secondary claim,that the absence of a mens rea element in the direct perpetra-tor instruction had also infected any conviction on the aidingand abetting theory. Keating v. Hood, 133 F.3d 1240, 1241-42(9th Cir. 1998).Rather than filing a petition for rehearing in this court orpursuing the secondary claim in state court, Keating decidedto waive that claim. Accordingly, on January 22, 1998, heagain filed the same habeas petition in the district court, thistime omitting the secondary claim. On February 3, 1998,shortly before the hearing that the district court had scheduledto discuss the new petition, the State Department of Correc-tions sent Keating a letter informing him that it expected themandate of this Court to issue on February 5 and ordering himto surrender to state prison authorities at 3:00 p.m. on Febru-ary 6 in order to finish serving his sentence.The district court held an expedited hearing on February 5,at which time it verbally granted Keating's habeas petition onthe ground that the omission of the mens rea element from thedirect perpetrator instruction violated due process. In doingso, the court first rejected the state's challenge to its jurisdic-tion over the petition. At the time he filed the new petition,Keating was no longer in prison, and our mandate had not yetissued on the decision which dismissed his appeal and rein-stated his conviction; thus, the state argued, the district court'sdecision granting his habeas petition remained in effect, andhe could not be considered "in custody" for jurisdictional pur-poses. To address the state's concerns, the court offered todelay the habeas proceeding as long as the state would prom-ise that Keating would remain free from state custody untilthe district court could rule on his petition. However, the statewas unwilling to make such a commitment. The court thendecided that it had jurisdiction to consider Keating's petition,analogizing his position to that of a defendant who is releasedon his own recognizance pending appeal, and holding that thestate's announcement of its plans to reincarcerate him sub-jected him to "a significant restraint upon his liberty."In reaching its decision on the merits of the petition, thecourt rejected the state's argument that the absence of any evi-dence to support the direct perpetrator theory made it clearthat the jury had convicted Keating as an aider and abettorand thus rendered the instructional error harmless. The courtrelied on the facts that the prosecutor had argued to the trialjudge that there was sufficient evidence to justify a direct per-petrator instruction, and that in his closing argument to thejury the prosecutor had employed language, analogies andreasoning that suggested direct perpetrator liability.Our mandate issued on February 5, 1998, and the next daythe district court filed its written order granting Keating'shabeas petition.6 The state has appealed the district court'sruling, objecting both on jurisdictional grounds and on themerits.II.JURISDICTION[1] The state raises a jurisdictional challenge, arguing thatKeating was not "in custody" at the time that he filed his newhabeas petition because he had been freed on the first petitionand the mandate had not yet issued on this Court's decisiondismissing that petition for failure to exhaust state remedies.Thus, the state reasons, we do not have jurisdiction over thenew petition. The sequence of events causes us to reach a dif-ferent conclusion. Keating's first petition was not actually dis-missed until February 11, after our mandate had issued. Wellbefore February 11, Keating had filed a new petition omittingthe unexhausted claim. The new petition simply restatedKeating's primary claim and dropped the secondary one. Thedistrict court treated his filing as a second petition; however,because the first petition had not yet been dismissed, andbecause, as the district court stated, "[t]he grounds [in theinstant petition] are identical to those stated in the 1995petition," the new petition would more properly be regardedas an amended petition deleting the unexhausted claim. SeeRose v. Lundy,
455 U.S. 509, 510
(1982) (when habeas peti-tion has been dismissed for failure to exhaust, petitioner has"the choice of returning to state court to exhaust his claims orof amending or resubmitting the habeas petition to presentonly exhausted claims to the district court."); Calderon v.U.S.D.C. ("Thomas"), 144 F.3d 618, 620 (9th Cir. 1998) (dis-cussing district court's power to allow amendment of habeaspetition to strike unexhausted claims); Calderon v. U.S.D.C.("Taylor"), 134 F.3d 981 (9th Cir. 1998) ("The SupremeCourt in Rose specifically provided habeas petitioners withthe option of amending their applications to delete unex-hausted claims rather than suffering a dismissal"); Guizar v.Estelle, 843 F.2d 371, 372 (9th Cir. 1998) (under Rose v.Lundy, petitioners "should have the option of either resubmit-ting their petitions with only exhausted claims, or exhaustingthe remainder of their claims in state court and then filing newpetitions . . . . [If petitioner] resubmit[s] his petition with onlythe exhausted claims, . . . the district court may accept it nuncpro tunc and reinstate its opinion.").7 We now hold that theinstant petition may be treated as an amendment or resubmit-tal of Keating's first habeas petition, and instruct the districtcourt to deem it as having been so filed, nunc pro tunc, undercase number CV 95-5151 JGD.8 See Calderon v. U.S.D.C.("Kelly"), 163 F.3d 530, 540 (9th Cir. 1998) (en banc), cert.denied, 119 S.Ct. 1377 (1999) (noting that district court couldexercise nunc pro tunc power to deem recently filed habeaspetitions to have been filed as of the filing date of two earlierpetitions that were erroneously dismissed); Miller v. Laird,464 F.2d 533, 534-35 (9th Cir. 1972) (filing of amended peti-tion relates back to date of original petition for purposes of incustody requirement).9 Because Keating's first petition wasfiled before the effective date of the Antiterrorism and Effec-tive Death Penalty Act, the provisions of the AEDPA do notgovern resolution of this case. See Lindh v. Murphy, 521 U.S.320, 327 (1997) (AEDPA does not apply to petitions pendingon date of enactment).10III.DUE PROCESSIt is not disputed that the omission of the mens rea elementfrom the direct perpetrator instruction was erroneous underPeople v. Simon, 886 P.2d 1271 (Cal. 1995). At issue iswhether this error in instructing the jury constituted a viola-tion of federal due process compelling the grant of habeasrelief.[2] Instructions that allow a jury to convict without findingevery element of the offense violate In re Winship's require-ment that "every fact necessary to constitute the crime" mustbe proven beyond a reasonable doubt. In re Winship, 397 U.S.358, 364 (1970). Due process "require[s] criminal convictionsto rest upon a jury determination that the defendant is guiltyof every element of the crime with which he is charged,beyond a reasonable doubt." United States v. Gaudin, 515U.S. 506, 510 (1995). Therefore, an instruction that relievesthe state of the burden of proving mens rea beyond a reason-able doubt contradicts the presumption of innocence andinvades the function of the jury, thereby violating due pro-cess. See Sandstrom v. Montana,
442 U.S. 510
, 521-24(1979). As the Seventh Circuit noted, "every federal court toconsider the question since the Court decided In re Winship. . . has agreed that a conviction procured without any juryinstruction on an essential element of the offense is constitu-tionally invalid." Cole v. Young, 817 F.2d 412, 424 (7th Cir.1987). See also Osborne v. Ohio,
495 U.S. 103
, 122-24 &n.17 (1990) (omission of element from jury instructions vio-lates due process); United States v. Mendoza, 11 F.3d 126,128 (9th Cir. 1993) ("[W]hen a trial judge omits an elementof the offense charged from jury instructions, it deprives thejury of its fact-finding duty and violates the defendant's dueprocess rights"). It is therefore clear that the omission of themens rea element from the instructions to the jury violatedKeating's right to due process by allowing the jury to convicthim without finding a requisite element of the offense.11IV.HARMLESS ERROR ANALYSIS[3] The Supreme Court has recently made it clear thatharmless error analysis is required even when an element ofan offense has been entirely removed from the jury's consid-eration. See Neder v. United States, No. 97-1985, _______ S. Ct._______, 1999 WL 373186 (June 10, 1999). The Court has alsoheld that a reviewing habeas court must determine from therecord whether an error is harmless, and that where greatdoubt exists, must hold the error prejudicial. See O'Neal v.McAninch,
513 U.S. 432
(1995).The state argues that the omission of the mens rea elementfrom the jury instruction was harmless, but only on a veryspecific ground. The state does not argue that even if the juryconvicted Keating as a direct perpetrator the instructionalerror was harmless because "the omitted element was uncon-tested and supported by overwhelming evidence, such that thejury verdict would have been the same absent the error."Neder, supra. Nor does it contend that a review of the recordwould establish, under the applicable harmless error standard,that the jury would have found that Keating had the mens rearequired under the statute, rendering any due process violationharmless. Instead, the state contends that the error was harm-less because the jury convicted Keating as an aider and abet-tor rather than as a direct perpetrator, and thus did not rely onthe legally erroneous theory. At oral argument, counsel forKeating stated on several occasions that the state had con-ceded that the error was not harmless if Keating was con-victed as a direct perpetrator, and the state did not contest thisstatement. Thus, there can be no question that the state's deci-sion not to assert that the error was harmless if the convictionwas based on the direct perpetrator theory was knowing anddeliberate.[4] The fundamental rule that applies when a jury deliversa general verdict that may rest either on a legally valid orlegally invalid ground is clear: the verdict may not stand whenthere is no way to determine its basis. "It has long been settledthat when a case is submitted to the jury on alternative theo-ries the unconstitutionality of any of the theories requires thatthe conviction be set aside." Sandstrom,
442 U.S. at 526
. Seealso Yates v. United States,
354 U.S. 298, 312
(1957),overruled on other grounds, Burks v. United States, 437 U.S.1 (1978) ("[T]he proper rule to be applied is that whichrequires a verdict to be set aside in cases where the verdict issupportable on one ground, but not on another, and it isimpossible to tell which ground the jury selected"); Strombergv. California,
283 U.S. 359, 368
(1931) ("[I]f any of theclauses in question is invalid under the Federal Constitution,the conviction cannot be upheld"). When two theories arepresented to a jury and one is factually insufficient, a convic-tion may be upheld, because a jury is "equipped to analyze theevidence" and so a court may assume that it rested its verdicton the ground that the facts supported. Griffin v. UnitedStates,
502 U.S. 46, 59
(1991). However, since"[j]urors arenot generally equipped to determine whether a particular the-ory of conviction submitted to them is contrary to law," a con-viction must be overturned if one of the theories that wassubmitted to the jury was legally erroneous. Id.[5] We have consistently interpreted Supreme Court prece-dent to require reversal in any case in which a verdict mayhave rested on a legally invalid ground. See United States v.Qualls, 140 F.3d 824, 829 (9th Cir.), vacated on othergrounds, 119 S.Ct. 398 (1998) ("[T]he Supreme Court hasdetermined that a verdict must be set aside in cases such asthis where the verdict is legally insupportable on one ground,yet supportable on another, and it is impossible to tell onwhich ground the jury relied."); United States v. Fulbright,105 F.3d 443, 451 (9th Cir.), cert. denied, 117 S.Ct. 1836(1997) ("[T]he jury instructions permitted the jury to choosea basis for conviction that was legally impermissible . . . .Because we have no way to ascertain the factual basis onwhich the jury convicted Fullbright, his conviction underCount II cannot stand."); United States v. Barona, 56 F.3d1087, 1098 (9th Cir. 1995) ("Where the jury is presented witha legally inadequate theory, as opposed to a factually inade-quate theory, Yates requires that the conviction be vacated").We have applied the same reasoning in habeas cases, holdingthat, even when the evidence supporting the legally correcttheory was "very strong" and the state did not argue thelegally erroneous theory to the jury, the conviction must bereversed when it is not possible to determine whether the juryrelied upon the erroneous theory to convict the defendant. SeeSuniga v. Bunnell, 998 F.2d 664, 667, 669-70 (9th Cir. 1993).We have noted that instructing the jury on a legally erroneoustheory in a case in which it is also instructed on a legally cor-rect theory is particularly damaging when the jurors are notrequired to agree unanimously on the theory of conviction; insuch cases, the possibility that even one juror might haverelied upon the legally erroneous theory requires invalidationof the conviction. See id. at 669.[6] There is a limited exception to the principle: reversalmay not be required if "it is absolutely certain" that the juryrelied upon the legally correct theory to convict the defendant.Ficklin v. Hatcher, No. 98-15025, slip op. at 5001 (9th Cir.May 25, 1999) (emphasis in original). In Ficklin , the jury hadbeen erroneously instructed that it could convict a defendantof murder under an implied malice theory if it found that themurder was committed as part of a robbery attempt. 12 How-ever, the jury had also been correctly instructed that it couldconvict the defendant of first degree murder only if it foundthat the defendant had committed a "wilful, deliberate andpremeditated killing." Id. at 4995. The defendant was con-victed of first degree murder. Ficklin held that the jury'sguilty verdict on the first degree murder charge demonstratedthat the implied malice theory "could not have played a partin the jury's determination." Id. at 5000. However, the courtexplained that affirmance of a conviction when the jury wasinstructed on a legally erroneous theory was permissible onlyin "situations in which this Court determines that it wasimpossible for the jury to have relied on the infirminstruction," and that its decision did "not suggest that a gen-eral verdict can be sustained if there is `ample' evidence pres-ented on a constitutional theory or if the prosecution `reliedprimarily' on a constitutional theory." Id. at 5002, 5001(emphasis in original).[7] We cannot say that it is "absolutely certain" that thejury did not rely on the legally erroneous direct perpetratortheory to convict Keating. Unlike in Ficklin, Keating's jurydid not make any finding that renders it "impossible" that itconvicted him as a direct perpetrator. Because of the absenceof any such finding, and because the jury was not instructedthat it could convict Keating only as an aider and abettor, wecannot determine with certainty that the jury rested its verdicton that theory.13[8] We reject the state's argument that the conviction ofKeating as a direct perpetrator was rendered impossible by theabsence of any argument or evidence presented in support ofsuch a theory.14 This argument is contradicted by the prosecu-tor's own statements at trial. After the close of the evidence,the prosecutor vigorously argued to the judge that Keatingcould be held criminally liable as a direct perpetrator.15 More-over, although the prosecutor did not expressly ask the jury toconvict Keating as a direct perpetrator, the language, analo-gies, and reasoning employed in his closing argument canreadily be interpreted as conveying a theory of direct perpe-trator liability to the jurors: that Keating was the source of theoffers to the bond sellers and was directly responsible for theomission of material information from these offers. 16[9] For the reasons set forth above, we cannot conclude thatthe instructional error was harmless.17 IV.CONCLUSIONBecause the jury may have convicted Keating as a directperpetrator, the omission of an essential element of theoffense from the jury instructions violated due process andrequires a grant of habeas relief. Accordingly, we AFFIRMthe district court's grant of such relief. The mandate will beheld pending a limited remand to permit the district court toenter the nunc pro tunc order described in this opinion.AFFIRMED.
_____________________________RYMER, Circuit Judge, concurring in part and dissenting inpart:I concur in the judgment on parts I and II of the majorityopinion, although as I explain below would hold we havejurisdiction over Keating's S 2254 petition for different rea-sons. I dissent from the due process/harmless error analysisthe majority employs in parts III and IV, and would insteadreverse the district court's decision to grant the petition.IAIn my view the majority's jurisdictional gymnastics are nei-ther necessary nor appropriate. Instead of treating Keating'sinstant habeas petition as an amendment or resubmittal of hisfirst petition, and instructing the district court to deem it ashaving been so filed (apparently as of the date the originalpetition was filed), I would simply say that the petition wasfiled prematurely (i.e., before our mandate issued), but sincenothing substantive happened in the meantime, once the man-date did issue Keating was then "in custody" and his habeasaction became ripe. No one suggests that Keating would nothave been "in custody" (literally) on February 6, and Hensleyv. Municipal Court,
411 U.S. 345, 352
(1973) providesauthority for this approach. In Hensley, the Court held that aconvicted state petitioner released on his own recognizancepending appeal was "in custody" for purposes of habeas juris-diction. In addition to the fact that Hensley was subject tostatutory restrictions and was at large only by virtue of stays,the Court noted that its conclusion that the petitioner is presently in custody does not interfere with any significant interest of the State. Indeed, even if we were to accept respondent's argument that petitioner is not in custody, that result would do no more than postpone this habeas corpus action until petitioner had begun service of his sen- tence. It would still remain open to the District Court to order petitioner's release pending consideration of his habeas corpus claim. Even if petitioner remained in jail only long enough to have his petition filed in the District Court, his release by order of the District Court would not jeopardize his "custody" for pur- poses of a habeas corpus action. Plainly, we would badly serve the purposes and the history of the writ to hold that under these circumstances the petition- er's failure to spend even 10 minutes in jail is enough to deprive the District Court of power to hear his constitutional claim.Hensley,
411 U.S. at 352
-53 (internal footnote and citationsomitted).This approach is also consistent with how we handle theflip side, when notices of appeal are filed after a decision inthe district court but before judgment is entered. In that cir-cumstance we simply take the pragmatic view that dismissingfor lack of jurisdiction and forcing the appellant to refile atthe appropriate time is silly; the triggering event will havepassed and nothing of moment will have occurred in theinterim. See Fed.R.App.P. 4(a)(2). Put differently, the court towhich the matter is going lacks jurisdiction when the filing ismade because the filing is premature, but has jurisdiction bythe time it matters. The premature filing is treated as havingbeen made at the time jurisdiction actually attaches. Here, thesituation is quite similar. Even if the State is correct that Keat-ing was not "in custody" on January 22, 1998, there is no dis-pute that he would have been taken into custody and wouldhave begun to complete serving his sentence on February 6(following issuance of this court's mandate on February 5).1To hold that he was not in custody on January 22 and to dis-miss for lack of jurisdiction for that reason "would do nomore than postpone this habeas corpus action until petitionerhad begun service of his sentence." See Hensley, 411 U.S. at352. In this case, that would have been for no more than fif-teen days. Nothing happened in the district court, except ahearing date (after the mandate was expected to issue) wasset. For this reason it makes sense to hold that whether or notthe district court had jurisdiction on January 22, Keating'sJanuary 22 filing--although premature--became effective asof the time this court's mandate issued returning him to cus-tody because no one questions that the court had jurisdictionas of February 5.BThe majority's answer to the jurisdictional question is trou-bling for a number of reasons. First, Keating never asked thedistrict court to construe his second habeas petition as anamendment to his first petition, nor did he try to "resubmit"his first petition without the unexhausted claim. Rather, hedeliberately filed his second petition as a separate actionunder a separate case number. He never argued in districtcourt or here that he should somehow be relieved in thisrespect.Second, the bottom line of this court's order with respectto Keating's first habeas petition was "DISMISSED WITH-OUT PREJUDICE." See Keating v. Hood ("Keating I"), 133F.3d 1240, 1242 (9th Cir. 1998). As we explained in Henryv. Lungren, 164 F.3d 1240, 1241 (9th Cir. 1999), dismissal ofan original petition for failure to exhaust state remedies, with-out retaining jurisdiction, terminates the litigation. This meansthat once this court's mandate issued in Keating I, there wasno petition to be "amended" or "resubmitted." Contrast, forexample, this court's order in Reutter v. Crandel, 109 F.3d575, 578 (9th Cir. 1997), where we also held that the petitionwas mixed and required dismissal but expressly stated:"Reutter may strike the unexhausted claim and resubmit hispetition to the district court." This court's order in Keating Iprovides no such option. Thus, on January 22 when Keating'ssecond habeas petition was filed, the district court no longerhad jurisdiction to do anything with respect to his first petitionsince it was still on appeal; even if it had been asked to do so,it could not have construed the second petition as an amend-ment or resubmittal because it couldn't do anything withrespect to the first petition on January 22. It got jurisdictionback when our mandate issued on February 5, but at that timethe first petition no longer existed because our dismissalexpressly terminated that litigation. Thus, the district courtcould not have construed the second petition as an amend-ment or resubmittal of the first petition (on either January 22or February 6) because there was no first petition to amend orresubmit. And there still isn't.Regardless, I do not see how we can now direct the districtcourt to amend Keating's first petition because (even if itwere still alive) the State had filed a responsive pleading tothe first petition. Therefore Keating himself could not haveamended his first petition or resubmitted an amended petitionwithout leave of court under Fed.R.Civ.P. 15(a). That, ofcourse, is a discretionary decision. Keating's case is thereforedoubly distinguished from Calderon v. United States Dist. Ct.("Thomas"), 144 F.3d 618 (9th Cir. 1998), and Calderon v.United States Dist. Ct. ("Taylor"), 134 F.3d 981 (9th Cir.1998), upon which the proposed opinion relies, see ante at12708, for in both Taylor, 134 F.3d at 986, and (presumably)Thomas, 144 F.3d at 620, the petitioner sought leave to amendhis original petition to delete an unexhausted claim and theState had not yet filed a responsive pleading when the peti-tioner did so.In any event, Henry precludes determining whether Keatingis "in custody" by reference to the date when he filed his firstpetition. Like Keating, Henry filed his original petition whenhe was clearly in custody and like Keating I, the original peti-tion was dismissed without prejudice for failure to exhaust.Henry filed his second petition after his release from prisonand discharge from parole, but he argued that he was in actualcustody on the theory that the date he filed the earlier habeaswas the operative date--not the date he filed the present peti-tion. We disagreed, noting that "[t]he district court's dismissalof Henry's original petition for failure to exhaust state reme-dies `terminated the litigation.' Farmer v. McDaniel, 98 F.3d1548,1552 (9th Cir. 1996), cert. denied, _______ U.S. _______ , 117S. Ct. 1474, 137 L. Ed. 2d 686 (1997). The relevant date is thedate on which Henry filed the present, second petition."Henry, 164 F.3d at 1241. We held that the filing of the pres-ent, second habeas petition, following dismissal without prej-udice of the first petition, does not relate back to the date ofthe first petition because the district court did not retain juris-diction over Henry's original petition when the court dis-missed for failure to exhaust. This is exactly what happenedhere, and it seems that the majority's opinion and order effec-tively makes an end-run around Henry simply because Henrywent back to state court instead of to the Ninth Circuit. Seeante at 12709 n.9. No reason occurs to me why this court's"DISMISSAL WITHOUT PREJUDICE" (without allowingfor new filings or retaining jurisdiction) did not "take effect"just the same as the district court's similar dismissal in Henry.Finally, I don't see how the majority's nunc pro tunc ordercould deem Keating's `amended' or `resubmitted' habeaspetition filed as of any date other than the date on which hissecond petition was actually filed (January 22, 1998). To theextent that the proposed opinion relies on Calderon v. UnitedStates Dist. Ct. ("Kelly"), 163 F.3d 530 (9th Cir. 1998), forthe proposition (asserted in the parenthetical following thecite to Kelly, see ante at 12708-9) that the "district court couldexercise nunc pro tunc power to deem recently filed habeaspetitions to have been filed as of the filing date of two earlierpetitions," Kelly does not in fact say this. Instead, what Kellysays is that the district court could, in its discretion pursuantto a motion under Rule 60(b)(6), set aside its earlier dismiss-als and permit or deem the later habeas petitions "to be filedin the earlier-filed [1992 and 1993] cases nunc pro tunc as ofthe date they were filed in the 1998 cases." Id. at 540 (empha-sis added). Thus, even if there were a live first petition, andeven if Keating had sought leave to amend or resubmit, andeven if the district court had allowed amendment or resubmit-tal, it would not follow that the filing would relate back toAugust 3, 1995 (when Keating originally filed his first peti-tion). I do not see how it could, under Henry or otherwise.Nor would it follow, see ante at 12709, that"[b]ecause Keat-ing's first petition was filed before the effective date of theAntiterrorism and Effective Death Penalty Act, the provisionsof the AEDPA do not govern resolution of this case. " Rather,we would be back to square one: a filing (however it isrecharacterized) that occurred--even if deemed to have beenmade in Keating's first petition--on January 22, a date onwhich the district court had no jurisdiction with respect to thefirst petition and over which it lost jurisdiction at the sametime it gained it back (when this court's mandate dismissedthe petition effective February 5).For these reasons, I would simply hold that whatever juris-dictional defect may have existed on January 22 was curedonce our mandate issued February 5.IIOn the merits, I am more troubled by the harmless erroranalysis than with the result itself. In a nutshell: I do not seehow we can decide this case without dealing with Californiav. Roy,
519 U.S. 2
(1997), which the majority opinion largelyignores. Roy involved Beeman2 error--failure to instruct onmens rea--in a felony-murder case. This is essentially a car-bon copy of the instructional error in Keating . The differenceis that in Keating, there were two theories of liability (directperpetrator and aiding and abetting) whereas in Roy, there wasonly one. If anything, it seems to me, this makes Roy's analy-sis more pertinent, not less.It is difficult to understand how Stromberg, Yates, Griffin,
_____________________________2 See People v. Beeman, 35 Cal. 3d 547 (1984).Suniga, Qualls and Ficklin3 square with Roy. But I also do notsee how we can avoid the conundrum.4The Stromberg line of cases says that when the jury isgiven instructions on two theories of liability, one of which isconstitutionally deficient, the court must conclude with abso-lute certainty "that the jury did not and could not have reliedon the faulty instruction to convict petitioner" in order to holdthe error harmless. See Ficklin, 177 F.3d at 1150. The defi-ciency in the Stromberg cases has to do with constitutionallyprotected, or otherwise noncriminal, conduct.Roy, on the other hand, speaks directly to a missing elementinstruction -- specifically, a missing intent element. It makesclear that we must apply Brecht to determine whether the typeof error that occurred here--failing to instruct on intent--isharmless. See Roy,
519 U.S. at 4
-5 (citing Brecht v.Abrahamson,
507 U.S. 619
(1993)). This requires us toreview the record to determine the error's effect. The questiona court has to answer in this context is: Did the failure toinclude intent [in the direct perpetrator] instruction have a"substantial and injurious effect or influence in determiningthe jury's verdict." Roy v. Gomez (Roy II), 108 F.3d 242, 243(9th Cir. 1997) (en banc) (adopting analysis, reasoning andconclusions stated in dissent to en banc decision in Roy v.Gomez (Roy I), 81 F.3d 863, 870-71 (9th Cir. 1996) (en banc)(Wallace, J. dissenting)). It is only if, at the end of this exer-cise, two of us have a "grave doubt" that the error (concededin this case) has a substantial and injurious effect thatO'Neal's `tie-breaker' rule applies. See O'Neal v. McAninch,
513 U.S. 432, 444
-45 (1995).One way to rationalize Roy with the Stromberg line ofauthority is to start with the erroneous instruction (here, directperpetrator) and determine whether a verdict of guilty underit is harmless error. If not (or if two of us are in "equipose"),then O'Neal and Stromberg apply with full force and reliefmust be granted. If, on the other hand, an error would beharmless under Roy, there is no basis for Stromberg reversal.Since Roy tells us how to analyze harmless error in afailure-to-instruct-on-intent case, we cannot play ostrich to therecord--or dismiss the California Court of Appeal opinionquite so easily--as the majority does. Stated differently,where Stromberg-type error is predicated on a Roy-type error,I doubt that the Stromberg-type error obviates the need firstto examine the record to determine whether the underlyingRoy-type error is harmless.From the record it appears that the error is harmless, partic-ularly in light of our obligation to give due deference to theCalifornia Court of Appeal's factual findings. See 28 U.S.C.S 2254(e)(1) (" . . . [A] determination of a factual issue madeby a State court shall be presumed to be correct. The applicantshall have the burden of rebutting the presumption of correct-ness by clear and convincing evidence.").5 The CaliforniaCourt of Appeal made quite extensive factual findings onKeating's criminal conduct and intent. First, it discussed evi-dence of his criminal intent throughout the years in question: He personally instigated the bond sales. He contin- ued to demand bond sales even when he knew they were literally worthless because of the deteriorating condition of ACC's net worth. He was personally warned in November 1986 (the month Keating ordered Symes and Fidel to initiate the bond sales program) by Patricarca of the FHLB of 14 specific problems, including Lincoln's failure to comply with the direct investment regulation and not meeting its net worth requirement. In December 1986 Patricarca personally pointed out the risky nature of the invest- ments in Arizona real estate. In 1987 Keating sought the assistance of several United States senators to shore up his support with the FHLB Board even in the face of negative coverage in Forbes Magazine. Keating ordered the sale of one-year bonds to gener- ate capital in October. In February 1988 Dochow met privately with Keating concerning the funneling of Lincoln assets to cover ACC's deteriorating finan- cial condition. The third-quarter 1988 loss was such a disaster for ACC that it was quite clear ACC could not repay the $94.8 million tax advance from Lin- coln, much less any individual investor's principal, yet Keating brought the entire bond sales force to Phoenix where he personally exhorted greater bond sales.ER 126-27. The court then recounted evidence of his closeinvolvement with the fraudulent bond sales: . . . The facts indicate Keating was in personal con- trol of Lincoln, even down to the detail of which pic- tures could be hung on the walls; that he selected both ACC and Lincoln officers; that he was in per- sonal contact with FHLB personnel who outlined for him the unsound business practices; that he was per- sonally aware of the deteriorating financial prospects of ACC and of its inability to repay Lincoln the $94 million advanced for taxes; that he refused to pro- vide negative information to anyone, going to the extent of hiring a public relations person in Phoenix to answer investors' negative telephone calls and ordering Fidel to purchase all available copies of Forbes Magazine near Lincoln offices; that the bonds had been rated by Moody's as below invest- ment grade; and that, while knowing all the negative trends, he still hosted the sales personnel at a posh party in Phoenix to encourage further bond sales to unsuspecting and unsophisticated members of the public.ER 130-31.Finally, the court reiterated: Keating was the chairman of ACC. He exercised the powers of an owner over both ACC and Lincoln by naming the officers and members of the boards of directors, directing policy, conducting negotiations with FHLB officials and other government regula- tors, setting the interest rates for Lincoln certificate of deposit accounts vis-a-vis ACC bonds, hiring per- sonnel, conducting meetings to encourage bond sales, and even down to selecting the decor at the Lincoln headquarters in Irvine. He personally reviewed all press releases prior to their issuance. He directed policy and procedures. He was the person in control. The individual investors . . . were not given the pertinent information necessary to make an informed judgment--information about the losses being sus- tained by ACC in its real estate operations and cash flow, the discrepancies concerning the $94 million tax prepayment by Lincoln advanced to ACC, the concerns of the FHLB about the unsafe and unsound operations of Lincoln and of its inability to meet its cash requirements due in large part to excessive cash outflow to ACC for management fees and dividends, the FHLB concern about the enormous salaries paid to corporate executives, or information about the bond ratings made by Moody's, which rated the bonds as being below investment grade, risky, and generally described as "junk bonds." In most cases the individual investors were not even aware that they were investing in bonds, let alone subordinated debentures, but rather thought their investments were merely a form of certificate of deposit fully insured by the federal government. We conclude from the facts that the prosecution has amply proven a persistent pattern consistent with criminal conduct whereby factual representations were made to the purchasers of debentures which were inaccurate and misleading--which representa- tions Keating knew to be false and unfounded while contemporaneously failing to impart any negative information which, if known to the individual inves- tors, would have provided them the basis for an informed decision.ER 135-37 (emphasis added). I do not believe that all of thesecomments can be summarily dismissed or disregarded as"dicta," as does the majority. See ante at 12715 n.14. Whilewe are not bound by the state appellate court's legal conclu-sions, both pre- and post-AEDPA law requires a considerabledegree of federal court deference to state court factual find-ings.Particularly in light of the deference accorded these find-ings, and based upon my independent review of the state trialcourt record, I believe it is fair and reasonable to concludethat the trial court's failure to instruct the jury on intent washarmless given the absolutely overwhelming evidence demon-strating Keating's criminal intent introduced at trial. As I seeit, "there is not even a reasonable possibility, " see Roy I, 81F.3d at 871 (Wallace, J. dissenting), based on this evidencethat Keating did not specifically intend to "sell or offer tosell" securities containing "untrue statements of material fact"or securities which omitted material facts "necessary to makethe statements made . . . not misleading." See ER 145-46("direct perpetrator" jury instructions). As such I haven't theslightest doubt--much less a "grave doubt"--about the harm-lessness of the instructional error in this case, and wouldtherefore reverse the district court's decision granting Keat-ing's habeas petition. But either way, I have "grave doubt"that the majority's methodology is quite on target.
___________________________FOOTNOTES 1 See United States v. Keating, 147 F.3d 895 (9th Cir. 1998) (holdingthat jurors' knowledge that Keating had been convicted in state court ofoffense arising out of same factual circumstances required reversal of fed-eral conviction).2 We discuss the facts of his alleged state crimes only insofar as they arerelevant to the errors in jury instructions that infected Keating's state trial.For a more detailed discussion of the conduct underlying the state charges,see People v. Keating, 19 Cal.Rptr.2d 899 (Cal. Ct. App. 1993).3 After closing arguments, defense counsel renewed his objection to thetrial judge's refusal to give the requested instruction.4 The instruction on aiding and abetting required that the jury find thefollowing: 1. An untrue statement of material fact or omission of a mate- rial fact was made by bond sellers in connection with the sale of bonds to the bond buyers identified in counts II through XVIII and XX, inclusive, of the indictment, and; 2. The defendant had knowledge that the bond sellers were making an untrue statement of material fact or omitting a material fact in the sales involved in each count, and; 3. The defendant intended to aid, encourage or facilitate the bond sellers in making an untrue statement of material fact or omitting a material fact in the sales involved in each count, and; 4. The defendant, by act or advice, intentionally aided, pro- moted, encouraged or instigated the making of the untrue state- ments of material facts or the omission of material facts.Trial Transcript at 7470-71.5 Keating was not immediately released because he was still serving timefor his federal conviction. Based on the progress of his direct appeal ofthat conviction, he was released on federal bond six months later, on Octo-ber 3, 1996.6 The decision to grant the habeas petition actually became effective onFebruary 11, the date that the written order granting Keating's petition wasentered on the docket. See Fed. R. Civ. Pr. 79(a) ("A judgment is effectiveonly when so set forth and when entered as provided in Rule 79(a)."); 46AM. JUR. 2D JUDGMENTS S 135 (1994) ("Entry of judgment occurs onlywhen (1) the essentials of the judgment or order are set forth in a writtendocument separate from the court's opinion or memorandum and (2) whenthe substance of the separate document is reflected in an appropriate nota-tion on the docket sheet.").7 The fact that Keating labelled the petition a second petition rather thanan amended petition is not dispositive. It is often necessary to look beyondthe labels that a party selects. See Thompson v. Calderon, 151 F.3d 918,920 (9th Cir. 1998) (en banc) (petitioner's motion for relief from judgmentunder Federal Rule of Civil Procedure 60(b) must be construed as succes-sive habeas petition); National Org. for Reform of Marijuana Laws v.Mullen, 828 F.2d 536, 541 (9th Cir. 1987) (court has discretion to treatappeal as petition for writ of mandamus).8 Because of the manner in which we resolve the jurisdictional issue, weneed not determine whether the district court was correct in concludingthat Keating was in custody when the January 22nd petition was filed. Wesimply note that he makes a strong argument that he was. Only the slimpossibility of a sua sponte request for en banc rehearing stood betweenKeating and reimprisonment. See Hensley v. Municipal Court, 411 U.S.345, 351-52 (1973) (petitioner released on recognizance pending execu-tion of sentence is in custody because "subject to restraints not shared bythe public generally" and faces imminent threat of incarceration) (internalquotation marks and citation omitted); Vargas v. Swan, 854 F.2d 1028,1030-31 (7th Cir. 1988) (unlikely possibility that INS would decline totake custody of petitioner under detainer warrant does not deprive courtof jurisdiction). Moreover, Keating was unquestionably in custody withrespect to his federal conviction, under a federal bond and subject torestraints on his freedom of movement. A habeas petitioner who is in cus-tody under one conviction may use the writ to challenge a future sentence.See Estelle v. Dorrough,
420 U.S. 534
(1975).9 Henry v. Lungren, 164 F.3d 1240, 1241 (9th Cir. 1999), is not to thecontrary. In that case, after the district court dismissed his first habeaspetition and failed to retain jurisdiction over it, the petitioner refiled instate court in order to exhaust his claims. Accordingly, unlike in this case,the dismissal took effect and, following termination of the state court pro-ceeding, the petitioner was required to file a second petition.10 We find Judge Rymer's disapproval of our holding on the jurisdic-tional question odd in view of her "pragmatic " attitude toward the filingof premature habeas petitions and appeals. With regard to the "flip side"(appeals) Judge Rymer concludes we permit premature filings becauserequiring refiling would be "silly." Although the rule is not as simple asthat, we are willing to accept her view that Keating's habeas petitionshould be treated as prematurely filed and that it became "ripe" when ourmandate issued. We adopt her position as an alternate holding on the juris-dictional question.11 We reject the state's argument that granting habeas relief to Keatingwould violate Teague's prohibition of reliance on rules adopted after adefendant's conviction has become final. See Teague v. Lane, 489 U.S.288 (1989). It has long been clear that omission of an element of theoffense from the jury instructions violates due process. The state's argu-ment rests on an erroneous interpretation of Teague -- an interpretationthat would preclude relief to any habeas petitioner unless the SupremeCourt had decided a case involving identical facts, circumstances, andlegal issues. Contrary to the state's contention, it is not necessary that theCourt have issued a decision that the failure to instruct on the particularelement involved violates due process. For purposes of Teague, theCourt's declaration of the general rule regarding a failure to instruct on anelement of the offense is sufficient.12 The instruction was erroneous under the double jeopardy clause; thedefendant had already pled guilty in juvenile court to the robbery offense.Slip op. at 4994, 4997 n.2.13 Moreover, the fact that the jury did not have to find that Keating knewthat the information that he conveyed to the bond sellers was false in orderto convict him as a direct perpetrator, but did have to find criminal intentin order to convict him as an aider and abettor, would provide a plausiblereason that some jurors might rely on the direct perpetrator instruction asa basis for conviction even if the other ground appears to be the more logi-cal basis for liability.14 The state also argues that the California Court of Appeals made a fac-tual finding that Keating had been convicted as an aider and abettor ratherthan as a direct perpetrator, and that this finding must be afforded defer-ence. However, the state court's conclusion that it was "obvious" thatKeating could not be convicted as a direct perpetrator because he "wasbeing tried on the theory that he aided and abetted in the sale of `junkbonds," was not a finding of fact, but rather a determination that any errorin instructing the jury on a direct perpetrator theory without giving Keat-ing's requested instruction was harmless. We do not defer to a statecourt's conclusion that a constitutional error was harmless, but insteadreview this question de novo. See Lawson v. Borg , 60 F.3d 608, 612 (9thCir. 1995); Dickson v. Sullivan, 849 F.2d 403, 405 (9th Cir. 1988). Addi-tionally, because the state court discussed the theory on which the juryrelied in the context of rejecting Keating's argument that there was insuffi-cient evidence to justify a direct perpetrator instruction, its conclusion wasdicta. See People v. Guiton, 847 P.2d 45, 50-53 (Cal. 1993) (finding thatone basis for a conviction is factually insufficient does not require reversalas long as there is a factually sufficient basis for the jury's verdict).15 Although the judge responded by expressing his disagreement withthe prosecutor's theory, he did not communicate this disagreement to thejury, and in fact instructed it that an "offer to sell" could include "everyattempt to, or offer to dispose of . . . a security " -- an instruction that theprosecutor himself had interpreted as allowing Keating's conviction as thesource of the offer. In the proposed jury instructions that it submitted priorto trial, the state had relied on this definition to argue that no "linkage orconnection" need be shown "between a defendant`offerer' and a victimbuyer," and argued that "the People are not obligated to prove direct andpersonal contact between each defendant and every victim." People's Pro-posed Liability Theory Jury Instructions at 26, 28.16 In fact, the district court concluded that "[a] reasonable reading of theprosecutor's closing argument makes the conclusion that he considered theaiding and abetting theory subsidiary to the direct perpetrator theorynearly inescapable." Dist. Ct. Opinion at 25. In his closing argument, theprosecutor characterized Keating as responsible for every act of AmericanContinental (stating that "Mr. Keating was the company"), utilized lan-guage that described Keating as "selling" the bonds, and employed analo-gies (of a drive-by shooter and a used car salesman) that were moresuggestive of a direct perpetrator than an aider and abettor. The prosecutoremphasized that Keating was the source of the material omissions of infor-mation by comparing the flow of information at Lincoln and AmericanContinental to an "hourglass," explaining that Keating "controlled theflow of information downstream" through his "conduit" (a bank officialwho had more direct contact with the bond sellers) in a manner that causedthe bond sellers to be unaware of the information suggesting that thebonds were a risky investment. In his opening argument, the prosecutorhad similarly emphasized Keating's direct responsibility for the materialomissions and thereby suggested that he had acted as a direct perpetrator.17 Even were we to review the record for the purpose of determiningwhether, if Keating was convicted as a direct perpetrator, the omission ofthe mens rea element would be harmless, we would reach the same result.Although it is not readily apparent how to resolve the tension between theCalifornia v. Roy,
519 U.S. 2
(1996), and the Stromberg line of cases,under any of the possible approaches, the result would be the same. UnderRoy, the most stringent approach, we would look first to the erroneousinstruction regarding the direct perpetrator theory of liability, and deter-mine whether a verdict of guilty under it would be harmless error. UnlikeNeder, in which the defendant failed to contest the omitted element, hereKeating vigorously challenged the state's evidence that pointed to hisknowledge of the falsity or misleading nature of the information that wasconveyed to the bond purchasers. Indeed, those attacks constituted Keat-ing's entire defense.While the evidence that was presented on that question would havebeen sufficient to support a conviction, the jury could also reasonably haveconcluded that a finding that Keating had the requisite criminal intentwould require it to take too many inferential steps. We would therefore beleft in "grave doubt" whether the jury would have convicted Keating asa direct perpetrator if required to find criminal intent. When "the matteris so evenly balanced that [a judge] finds himself in virtual equipoise asto the harmlessness of the error," and the court is therefore left with a"grave doubt about the likely effect of an error on the jury's verdict," theerror must be treated as if it were not harmless. O'Neal,
513 U.S. at 435
.That, in our view, is the circumstance in which we find ourselves. We notethat because the state did not raise the Roy question on appeal, a moreextensive analysis of the facts and the law relevant to that question is notrequired.1 As the Department of Corrections's February 3, 1998 letter directs,Keating was to self-surrender at Wasco State Prison at 3:00 p.m. on Febru-ary 6, 1998.3 See Stromberg v. California,
283 U.S. 359
(1931); Yates v. UnitedStates,
354 U.S. 298
(1957), overruled on other grounds, Burks v. UnitedStates,
437 U.S. 1
(1978); Griffin v. United States,
502 U.S. 46
(1991);Suniga v. Bunnell, 998 F.2d 664 (9th Cir. 1993); United States v. Qualls,140 F.3d 824, 829 (9th Cir.), vacated on other grounds, _______ U.S. _______, 119S. Ct. 398 (1998); and Ficklin v. Hatcher , 177 F.3d 1147 (9th Cir. 1999).4 When the district court granted Keating's original petition in April1996, it did not have the benefit of our decision in Roy v. Gomez (Roy II),108 F.3d 242 (9th Cir. 1997) (en banc), on remand from the SupremeCourt.5 This is so whether or not the AEDPA applies, although how the defer-ence due is articulated differs somewhat.