It's a very interesting case on the question of exhaustion (see FAQ 4).
The petitioner had not raised the claim that the trial court, as opposed to the hearing court, had failed to suppress his confession based on a Miranda violation. He then kind of attempted to raise it on appeal. There is no indication in the appeals court's decision that it had addressed this specific claim on the merits.
So, the question is whether this claim is exhausted?
The Second Circuit digs deep into this question, but then does not definitively answer it. Instead, it says, in dicta, that it is persuaded, under the Supreme Court's decision of Castille v. Peoples, 489 U.S. 346 (1989) (stating that fair presentation does not occur where claim is raised in discretionary context where merits will be considered for special and important reasons), that if the Appellate Division refuses to exercise its discretionary authority to review an unpreserved claim, that means that it is unexhausted, even if the petitioner had presented it to that appellate court.
But that's not the holding. Instead, it holds that the claim was not fairly presented since the claim raised in the state court was not the same claim that was being raised in the federal habeas proceeding.
Here's the Second Circuit's conclusion:
(2) The applicability of Castille to this case need not be decided because the record
reveals a more fundamental exhaustion defect: Acosta failed clearly to identify for the state appellate court that he was charging the trial judge with an error in failing sua sponte to reconsider the admissibility of his confession, which error was separate and distinct from any decision made by the hearing judge in denying Acosta’s suppression motion.
(3) Because no state remedies remain available to Acosta, his unexhausted claim is
deemed procedurally barred. Acosta fails to demonstrate the cause and prejudice or
miscarriage of justice necessary to secure a merits review of such a barred claim. Indeed, he cannot do so because his claim lacks merit. On the record presented to the state court, Acosta cannot demonstrate that clearly established Supreme Court precedent compelled the state court to conclude that his confession, made after invocation of the right to counsel, was inadmissible as the product of interrogation rather than admissible as a volunteered statement.
(1) As we recently learned from Cone v. Bell (discussed here), the State cannot argue that the failure to raise a claim in the trial court does represents an independent and adequate state law ground to bar habeas relief where the appellate court does not reject the claim as unpreserved and, instead, decides the claim on the merits.
(2) Similarly, it would certainly appear that, under the Second Circuit's reasoning, if the appellate court decided to address an unpreserved claim on the merits, then the claim would be exhausted.
(3) The case presented a very interesting habeas issue, but it is clear that the Second Circuit did not need to address it. The whole Castille discussion is dicta. Since it is a very important issue in habeasland, I think it would have been better to have waited to analyze it when it was necessary to the conclusion of the case. Now, a different panel can simply disagree and go a different way. At least, habeas petitioner's can still make the argument. Knowing the state of habeas law these days, petitioner's probably won't be able to persuade a different panel that this dicta should not be followed. But you never know.