Rehab? No, No, No.

United States v. Gilliard, No. 11-1088 (2d Cir. February 16, 2012) (Wesley, Lohier, CJJ, Rosenthal, DJ)

Tapia v. United States, 131 S.Ct. 2382 (2011), held that the district court cannot impose or lengthen a prison sentence based on the defendant’s rehabilitative needs. Here, the circuit joins the national trend of reading Tapia narrowly.

Troy Gilliard, sentenced before Tapia came down, faced a 57 to 71 month range for heroin trafficking; both the defendant and the government sought a within-guideline sentence, and probation recommended 65 months, also within the range. In imposing sentence, the court mentioned Gilliard’s criminal history, the seriousness of the offense, the need for specific deterrence, and also mentioned Gillard’s rehabilitative needs - he had both substance abuse and medical issues - while in custody, noting that it was “important” that he be “sentenced in such a way that you are able to address those problems.” Taking into account “everything [that it had] talked about,” the court sentenced Gilliard to 96 months’ imprisonment.

The appellate court rejected the argument that the court’s reference to Gilliard’s rehabilitative needs violated Tapia. The court did not see those comments as connecting the rehabilitative needs to the length of Gilliard’s sentence, which the sentencing court explicitly did in Tapia. “Unlike in Tapia, the record here does not suggest that the length of Gilliard’s sentence was based on the district court’s consideration of his rehabilitative needs.” Rather, to the circuit, the court’s mention of Gilliard’s rehabilitative needs was confined to the - permissible - context of recommending to the BOP appropriate treatment programs.

Thoroughly Unappealing

United States v. Buissereth, No. 09-5358-cr (2d Cir. March 15, 2011) (Cabranes, Chin, CJJ, Crotty, DJ)

This decision found great fault with a sentencing that “left much to be desired.” The district court “failed to (1) rule on the numerous filed objections to the PSR; (2) rule on the requests for downward departures and a variance; (3) adopt the findings of the PSR; (4) mention, much less articulate its consideration of, the relevant factors set forth in 18 U.S.C. § 3553(a); or (5) calculate an applicable sentencing range under the Sentencing Guidelines.”

Nevertheless, the sentence was within the range specified in the plea agreement’s waiver clause, and the waiver was otherwise valid. The court accordingly dismissed the appeal. But it did note that,= the waiver did not “relieve the District Court of its responsibility to follow the procedural requirements related to the imposition of sentence,” even if it “preclude[d] this Court from correcting the errors alleged to have occurred below.” That said, there is a point at which “an arbitrary practice of sentencing without [proffered] reasons would amount of an abdication of judicial responsibility subject to mandamus” and an appeal waiver would not be enforced.

This case, while bad, did not “present such an extraordinary circumstance,” since the record as a whole indicates that the court at least gave “due consideration to” the defendant’s sentencing arguments.

Land of Enhancement

United States v. Tutty, No. 09-2705-cr (2d Cir. July 16, 2010) (Calabresi, Pooler, Chin, CJJ)

In United States v. Dorvee, 604 F.3d 84 (2d Cir. 2010), the court held that the child pornography Guidelines are entitled to less deference because they are not the product of an “empirical approach,” and because they “provide for a series of enhancements that apply in virtually every case,” resulting in enormous sentences “even in run-of-the-mill cases.” See Deconstruction Project, posted May 23, 2010. Here, following on the heels of Dorvee, the court found procedural error in the district court’s refusal to consider a broad-based policy challenge to those Guidelines.

Background

Defendant Jason E. Tutty pled guilty to possessing digital images of child pornography that he had received and distributed over the Internet using a file sharing program. He had no criminal history and no know history of sexual contact with a child. At sentencing, in the face of a 168 to 210-month range, he argued both that his personal history and characteristics warranted a lesser sentence, and that, on policy grounds, the court should not follow the Guidelines. The court indicated that it lacked the authority to deviate from the Guidelines solely on policy grounds, and sentenced him to 168 months.

The Court’s Decision

Tutty challenged only the substantive reasonableness of the sentence. Interestingly, however, the court, considering the case “nostra sponte in the interest of justice,” vacated the sentence on procedural grounds and remanded for sentencing. It held that the district court “committed procedural error when it concluded that it could not consider a broad, policy-based challenge to the child pornography Guidelines.”

The court did not rule on substantive reasonableness, but noted that, on remand, the district court would “now have the benefit of our decision in Dorvee.” The circuit directed that the district court “take note of the[] policy considerations” identified in Dorvee and “bear in mind that the ‘eccentric’ child pornography Guidelines ... ‘can easily generate unreasonable results’ if they are not ‘carefully applied.’”

Deconstruction Project

United States v. Dorvee, No. 09-0648 (2d Cir. May 11, 2010) (Cabranes, Parker, CJJ, Underhill, DJ)

In this first-of-a-kind opinion, the court (1) held that a within Guideline - albeit statutory maximum - sentence was substantively unreasonable and (2) found that an offense Guideline other than the crack Guideline was not the product of the Commission’s traditional empirical role and hence, under Kimbrough, was not entitled to deference.

Background

While chatting online with undercover officers posing as teenage boys, Justin Dorvee sent them computer files containing child pornography. He was arrested when set out to meet one of the boys. A search of his home revealed several thousand still images and more than 100 videos containing child pornography. He ultimately pled guilty to one count of distribution of child pornography.

Under a correct application of U.S.S.G. § 2G2.2, which prescribed a base offense level of 22 plus enhancements for such things as the number and content of the images, he faced a sentencing range of 262 to 327 months’ imprisonment. However, since the statutory maximum sentence was 240 months, 240 months became his Guideline range.

At sentencing, Dorvee introduced medical evidence intended to mitigate that sentence, including evidence that he was a compulsive collector and had serious personality disorders, but was “not a predator” and would respond well to treatment. The court expressed sympathy for him, but still concluded that he was a “pedophile” who would have sex with a younger boy if he could, even if he would not initiate the behavior. After reviewing the statutory factors, the court sentenced Dorvee to 240 months, less six months and fourteen days of uncredited time he had served in state court, for a total sentence of 233 months and sixteen days.

The Appeal

The circuit vacated the sentence, finding it to be both procedurally and substantively unreasonable.

1. Procedural Error

The procedural error was the district court’s apparent view that the Guideline range was still 262 to 327, and not, per U.S.S.G. 5G1.1(a), 240 months, along with its erroneous corollary conclusion that the higher range was the benchmark for any variance.

This error was not harmless - it “carried serious consequences” for Dorvee. If the district court intended to impose a sentence “relatively far below the guideline,” as it said it did, Dorvee “did not receive the benefit of such an intention.” Where “the district court miscalculates the typical sentence at the outset, it cannot properly account for atypical factors and we, in turn, cannot be sure that the court has adequately considered the § 3553(a) factors. That is what appears to have happened here, and constitutes procedural error.”

2. Substantive Error

The court also deviated from its usual practice of refraining from reviewing for substance until the procedural errors have been corrected, and instead “reach[ed] both the procedural and substantive reasonableness of the sentence [since it found] both types of error.”

Here, even accepting the need for punishment and the requirement that it defer substantially to the district court’s judgment, the court found the sentence to be substantively unreasonable.

First, the district court placed unreasonable weight on its assumption - unsupported by the record evidence - that Dorvee was likely to actually sexually assault a child. The district court’s explanation of the need for deterrence also “ignored the parsimony clause,” offering no “clear reason” why the maximum sentence, instead of some lower sentence, was required to deter an offender like Dorvee.

Next, the circuit took issue with the child pornography Guideline itself, calling it “fundamentally different from most” and noting that “unless applied with great care, [it] can lead to unreasonable sentences that are inconsistent with what § 3553 requires.” With this introduction, the court then systematically deconstructed U.S.S.G. § 2G2.2.

It began by noting that the Sentencing Commission “did not use [an] empirical approach in formulating the Guidelines for child pornography.” Rather, it systematically increased the penalties based directions from Congress, even as it “openly opposed these Congressionally directed changes.”

The court went on to agree that the enhancements included in § 2G2.2 “cobbled together through this process routinely result in Guidelines projections near or exceeding the statutory maximum, even in run-of-the-mill cases” because the base offense level has been increased from 13 to 22 and the enhancements “apply in nearly all cases.” As a result, “adherence to the Guidelines results in virtually no distinction between the sentences for defendants like Dorvee, and the sentences for the most dangerous offenders who, for example, distribute child pornography for pecuniary gain and who fall in higher criminal history categories.”

Under Kimbrough, a court “may vary from the Guidelines range based solely on a policy disagreement with the Guidelines, even where that disagreement applies to” many offenders or offenses. “That analysis applies with full force to § 2G2.2.”

The opinion ends with a message to district judges, encouraging them to “take seriously the broad discretion they possess in fashioning sentences under § 2G2.2 ... bearing in mind that they are dealing with an eccentric Guideline of highly unusual provenance which, unless carefully applied, can easily generate unreasonable results.”

American Idle

United States v. Hernandez, No. 09-1421-cr (2d Cir. May 5, 2010) (Jacobs, Kearse, Calabresi, CJJ)

Here, the circuit found that the defendant’s sentence was procedurally unreasonable because it took the district court fifteen years to get around to imposing it.

Background

In 1991, Hernandez was convicted after a jury trial of drug trafficking and associated crimes of violence. Judge Platt sentenced him to 405 months’ imprisonment and a large fine. The sentence included an aggravating role enhancement. On Hernandez’ first appeal, decided in 1993, the court vacated the sentence because the judge had imposed the enhancement over objection but had made “no finding” with respect to Hernandez’ role.

Judge Platt did not act on the remand. In 1997, at the government’s request, he appointed counsel for Hernandez, but still did not resentence him. Finally, in 2008, fifteen years after the remand was ordered, Hernandez’ mother wrote the judge a letter “expressing bewilderment.” This, finally, prompted the him to act. Sort of. He held a conference, attended only by the government, in which he indicated that there was no need for further findings on Hernandez’ role because “[Judge Kearse] did it right there in her own opinion, answered the question she said I didn’t answer.”

In December of 2008, Hernandez filed a sentencing memorandum urging the court to impose a lower sentence, which included substantial evidence of his rehabilitation. Judge Platt finally conducted the resentencing in March of 2009. Sort of. The proceeding consisted of his handing out a written memorandum that addressed the role enhancement, but “did not discuss evidence of Hernandez’s rehabilitation.” After hearing from the parties, he imposed the same sentence, without ever “expressly react[ing] to evidence of Hernandez’ rehabilitation or other proposed mitigating factors.” The Judgment included a Statement of Reasons that indicated that the judge had “considered all the ... factors in 18:3553(a),” even though he was “not required to [conduct] a full re-sentence outside of the Court of Appeals Mandate.”

The Court of Appeals’ Decision

The court vacated the sentence, holding that the failure to “consider how intervening developments - in particular Hernandez’s rehabilitation - affected the Section 3553(a) analysis” was error. That evidence, if credited, “could affect the weight given to considerations that were discounted in 1991 by the gravity of Hernandez’ crime” such as his youth and the fact that he was a drug addict when the crime occurred.

What is unusual about this case is that the court second-guessed Judge Platt’s rote incantations that he had considered all of the statutory factors. The court held that this was a case where “record evidence suggest[ed] otherwise.”

First, the judge “misconstrued the scope of re-sentencing.” He thought, at least at first, that he did not need to make factual findings in support of the role enhancement at all. Moreover, his written sentencing order focused only on those findings, apparently based on his belief that he was not required to conduct a full resentencing. This caused him to “perfunctorily den[y] those arguments it deemed outside the limited scope of resentencing.”

This was procedural error “in a resentencing so long delayed.” While there was a presumption that the resentencing would be limited, not de novo, here there were compelling reasons for that presumption to be overcome. During the fifteen year hiatus, the law of sentencing had changed substantially and Hernandez might have undergone a substantial rehabilitation.

Given this, that Judge Platt focused only on the seriousness of the offense was an indication that he “failed to consider the Section 3553(a) factors.” This procedural error required that the sentence again be vacated.

The court also ordered that the resentencing take place before a different judge. Since Judge Platt imposed the same sentence twice without making the required findings, he may “reasonably be expected to have substantial difficulty ignoring his previous views during a third sentencing.” Also, while there was no evidence of actual bias against Hernandez, an objective observer might question the judge’s impartiality. Finally, reassignment will not waste judicial resources, since no judge has yet done what needs to be done in this case.

The Concurrence

Judge Calabresi concurred, writing separately to set out his view that the fifteen-year delay by itself warranted reassignment to a different judge, since “the circumstances surrounding that gap may lead an objective observer to conclude that it was caused in part by the behavior of the sentencing judge.”

Any resentencing outcome in such a situation might reasonably be called into question. If the judge imposes a lower sentence after the delay, an observer might think he did it to compensate for his own dilatory behavior or to punish the government for its neglect. If the judge imposes the same sentence, an observer might think that he was just trying to “sweep the matter under the rug” by suggesting that the delay was immaterial to the outcome. Finally, if the judge imposes a higher sentence, an observer might wonder if the judge improperly blamed the delay on the defendant.

Comment

This is the second time in less than one year that the court has confronted a case where Judge Platt let a resentencing languish for an unacceptably long time. In August, the court decided United States v. Ray, in which it held that Judge Platt’s unexplained and prejudicial delay in resentencing the defendant - as here, the delay was fifteen years - amounted to a due process violation. See Delay Gratification, posted August 31, 2009.

The two cases offer an interesting contrast in appellate litigation strategy. Ray pitched the issue as constitutional one, arguing, unsuccessfully, under the Sixth Amendment right to a speedy trial and, successfully, under the due process clause. Although she prevailed, to some degree, she did not win a full resentencing. And she had to show “substantial and demonstrable” prejudice to get even the limited relief she got.

Hernandez, on the other hand, chose to make a 3553(a) argument. He seems to have had an easier time, since he did not have to make such a strong showing of prejudice. In fact, here, it does not seem that the case really turned on prejudice at all. While, at least in theory, any defendant making a § 3553(a) procedural claim should argue that the error was not harmless, the Hernandez opinion never gets to that question. There is nothing in the opinion to indicate that the court thought that there either should or would be a lower sentence on remand.

Timewell Spent

United States v. Timewell, No. 07-4587-cr (2d Cir. June 1, 2009) (Miner, Raggi, Livingston, CJJ)

Here, the circuit held that the district court’s reasons for denying a Crosby remand rendered the sentence procedurally unreasonable. It remanded the case for reconsideration, with instructions.

Background

Gregory Timewell was a major international trafficker in marijuana and hashish. In the late 1990's, he was prosecuted in the Eastern District of New York, where he cooperated with the government. In 1998, he signed a cooperation agreement, which included a list of his assets that he agreed to forfeit to the government. Three years later, it emerged that Timewell had misled the government about some of his assets - millions of dollars hidden in Switzerland. His explanation was that, at the time of his original cooperation, he believed that the money had been appropriated by one of his associates. He later learned that this was not true, but did not tell the government, a violation of his cooperation agreement. As a result of this, in 2001, he pled guilty to making false statements to the government.

Timewell was sentenced in 2004, before Booker. His offense level was 41: a subtotal of 44, which included a 2-level increase for obstruction of justice based on his concealment of assets, less 3 levels for acceptance of responsibility, which produced a 324-to-405-month sentencing range. The government decided to honor cooperation agreement and made a 5K1.1 motion, urging a “substantial” sentence reduction in light of Timewell’s “extensive” cooperation, which included testimony at a co-defendant’s trial. The court downwardly departed, but only to 275 months’ imprisonment.

The Crosby Remand

In preparation for the Crosby remand, Timewell’s counsel again recounted the scope of Timewell’s cooperation, and also noted that one of Timewell’s co-conspirators received a 120-month sentence. Also before the district court were letters from the government, and a former DEA agent who had debriefed Timewell.

At the Crosby hearing, the assistant again praised Timewell for his forthrightness in cooperating, and noted that a different co-conspirator had received a 180-month sentence with no 5K1.1 motion. The government asked the court to give “serious consideration and weight to the argument” that there should not be a “significant disparity” between Timewell and that co-conspirator.

Despite this, the district court remained concerned about Timewell’s earlier failure to disclose some assets. The court entered an order in October 2007 in which it decided not to resentence Timewell. First, the court found no unwarranted sentencing disparity between Timewell and his co-defendants because, unlike them, Timewell violated his cooperation agreement by failing to disclose assets. The court also took into account that the government typically refuses to file a 5K1.1 motion at all when a cooperator has violated the plea agreement, and noted that it had for this reason imposed a sentence “substantially” longer than it otherwise might have.

The Appeal

On appeal, the circuit vacated that order, and remanded the case with instructions. The court identified five procedural errors in the district court’s approach.

First, the lower court did not “respond directly” to the inquiry “required” by Crosby - whether the sentence would have been “materially different from the sentence originally imposed” had the district court known that the sentencing guidelines were not mandatory.

In addition, the court erred in taking into account what it perceived to be the government’s customary practice of voiding plea agreements whenever a defendant violates one of its terms. There was no evidence before the district court that such a practice existed, and it was procedural error to rest a sentence on a “clearly erroneous finding of fact.”

The district court also erred by increasing Timewell’s sentence based on this supposed “practice” in the first place. “That the government usually voids cooperation agreements upon a breach by the defendant should not be a reason to constrain a district court from giving proper effect to a 5K1.1 letter if the government decides to submit [one] notwithstanding the defendant’s breach.”

Fourth, the court erred in its belief that, absent a 5K1.1 motion, the guidelines would have recommended a life sentence. In fact, the range was 324 to 405. A district court errs when it “makes a mistake in its Guidelines calculation.”

Finally, the court mischaracterized Timewell’s unwarranted disparities argument by including more co-defendants in its analysis than Timewell had proposed as a basis for comparison. The district court included defendants who had been sentenced after Timewell was sentenced, but under Crosby a court considering a remand must limit its decision to the circumstances “existing at the time of the original sentence.”

The circuit remanded the case and directed that the district court consider the Crosby inquiry “without consideration of past practices of the government in regard to the rescission of cooperation agreements.” In addition, if the court decides to revisit the original sentence, it should consider (1) the sentencing disparities among co-defendants; (2) the government’s recommendation of a “substantial” departure from the guidelines “in view of Timewell’s excellent cooperation”; and (3) the factors set forth in § 5K1.1 itself.

Take It To The Banc

United States v. Cavera, No. 05-4591-cr (2d Cir. December 4, 2008) (en banc)

Gerard Cavera pled guilty to participating in a scheme in which guns were purchased in the South then transported to New York City for sale. At sentencing, the district court imposed a sentence six months longer than the top of the Guideline range, and an above-Guideline fine, based on two “location specific” concerns. The court held that firearms offenses are more dangerous in densely populated urban environments and that the need for deterrence was greater because New York’s strict gun laws made it one of the few places where gun-running was profitable.

On Cavera’s appeal, a panel of the court vacated the sentence as procedurally unreasonable (the case was blogged here twice, most recently in October 2007 under the title Location, Location, Location). The circuit then took up the case en banc. Although the court divided deeply on some issues, the majority vacated the panel opinion and affirmed the sentence.

The Deterrence Theory

The en banc majority opinion, written by Judge Calabresi, agreed that the district court’s deterrence rationale was a valid basis for an upward variance.

There is “no special reason to think that reliance on a locality-based categorical factor is - without more - suspect.” And, the “existence and enforcement of strict local gun laws in a particular jurisdiction is likely to make the cost of getting a gun in that jurisdiction higher than in a jurisdiction with lax anti-gun laws.” This, in turn, increases “the profits to be had from trafficking guns into the strong-enforcement jurisdiction.” The penalty thus needs to be “correspondingly higher to achieve the same amount of deterrence.” The majority cited “considerable” empirical support for this position, although it noted that, “[l]ike any economic theory,” the point was not without controversy. Nevertheless it was not an abuse of discretion for the district court to rely on this type of reasoning.

Judge Straub dissented, and was joined by Judges Cardamone, Sotomayor and Pooler. Judge Straub argued that it was error for the district court to conclude that, “as a general matter,” greater deterrence was necessary because gun trafficking is more profitable in New York than elsewhere, although there would have been no error if the district court had found that Cavera himself had been motivated by such greater profits.

More importantly, the dissenters disagreed that, as a factual matter, gun trafficking was more profitable in New York. Their review of the information relied on by the district court pointed to no such conclusion.

Judge Sotomayor wrote a separate dissent, joined by the other dissenters, that made this same point, describing the district court’s deterrence reasoning as “unsubstantiated and unconvincing,” since it was based on a single law review article that “hypothesized - without the benefit of data - that gun trafficking might be more profitable in areas with strict gun laws.” This opinion also points out that the majority should not have relied on data and economic theories not referenced by the district court. This “shifts the appellate court’s role from reviewing the lower court’s sentencing rationale to crafting it.”

The Dangerousness Theory

The members of the court had an even wider range of views on the district court’s conclusion that firearms offenses are more dangerous in densely populated urban areas. The court did not rule on the issue.

As summarized in the majority opinion, “some of us would hold that the district court, in its wide discretion, permissibly relied on a determination that trafficking guns into an urban area is likely to create more harm than the national average offense envisaged by the Guidelines. Others would hold that the district court erred to the extent that it based the sentence on the notion that guns are more dangerous in metropolitan areas. Still others are unsure whether reference to such broad, nonspecific geographical and demographic factors is appropriate in the context of this case.”

Other Interesting Tidbits

The majority opinion has a lot of other interesting, if more general, material that is worth looking at.

1. En Banc procedure

This opinion gives nice explanation of the court’s view of the en banc procedure itself, a procedure that the court uses “sparingly.” It notes that when the members of the court are in “substantial agreement,” an en banc opinion “gives us the opportunity to speak somewhat more broadly, for the purpose of giving guidance to district courts in this Circuit and to future panels.” It also notes that when the members of the court “possess significantly differing views on a particular issue,” it is “often wise to avoid speaking as an en banc Court unless the point is one that is strictly necessary to decide the case.” This is interesting, as it might explain the infrequency of en banc rehearing in this circuit.

Most importantly, however, Judge Calabresi’s majority opinion seems to have abandoned, sub silentio, the circuit’s annoying practice of using the phrase “in banc” instead “en banc.”

2. Substantive Reasonableness

The majority opinion changes the court’s standard for substantive sentencing review, even though the court did not review Cavera’s sentence substantively. From now on, the court will “set aside a district court’s substantive determination only in exceptional cases where the trial court’s decision cannot be located within the range of permissible decisions ... . To the extent that our prior cases may be read to imply a more searching form of substantive review, we today depart from that understanding.”

The opinion also describes the substantive review process in detail. First, the court takes into account “the totality of the circumstances, giving due deference to the sentencing judge’s exercise of discretion, and bearing in mind the institutional advantages of district courts.” The Guideline range is not presumptively reasonable, while a non-Guideline sentence is not presumptively unreasonable, and there need not be “extraordinary” circumstances to justify one.

Substantive review is also informed by 18 U.S.C. § 3661, which provides that there is “no limitation” on the information about the defendant that a court can consider “for the purpose of imposing an appropriate sentence.” Section 3661 is not a “blank check” for district courts, however. A appellate court will consider “whether a factor relied on by a sentencing court can bear the weight assigned to it” under the totality of the circumstances of the case.

The court recognizes that a district court may vary from the Guidelines based solely on a policy disagreement, even where that disagreement applies to a wide class of offenders or offenses. Variances from the Guidelines will “attract greatest respect” on appeal when the judge finds that the case is outside the “heartland,” while a finding that a Guideline sentence does not properly satisfy § 3553(a) in a “mine-run case” will be subject to “closer review.”

The question of when a sentence merits “closer review,” however, is still evolving. “More will have to be fleshed out as issues present themselves.”

3. Procedural Reasonableness

Procedural review entails, in very large part, considering the district court’s explanation for the sentence. An adequate explanation is a “precondition for meaningful appellate review.” The explanation must satisfy the reviewing court that the district court “has considered the parties’ arguments and that it has a reasoned basis for exercising its own legal decisionmaking authority.”

A district judge imposing a non-Guideline sentence “should say why she is doing so” and should “bear[] in mind that a major [variance]... should be supported by a more significant justification than a minor one.” However, once the appellate court is “sure” that the sentence “resulted from the reasoned exercise of discretion, we must defer heavily to the expertise of district judges.”

Such deference might well “result in substantial variation among district courts,” but this is a “necessary cost” of the Booker remedy. In its recent cases, “the Supreme Court has made clear its view that disparities in sentences imposed by different district judges are more likely to reflect justified differences than are those arising from difference of opinion among appellate panels.”

State of Disagreement

United States v. Williams, No. 05-4416-cr (2d Cir. April 25, 2008) (Calabresi, Cabranes, CJJ, Korman, DJ)

Here, the court vacated two below-guideline sentences that seemed to have been imposed largely in order to minimize a perceived disparity between the sentence recommended by the guidelines and the sentence that would have been meted out in state court.

Williams and Shuler sold crack together in Yonkers. They were first charged in state court, then the case was transferred to federal court. For reasons that are not clear, they were separately charged and their cases were handled by different district judges.

Williams was sentenced first, by Judge McMahon. He faced a 70 to 87 month range (now it would be 57 to 70 due to the crack guideline amendments) but the judge, persuaded by Williams’ attorney that the plea offer from Westchester County D.A.’s office’s would have been between 12 and 66 months, sentenced him to 36 months’ imprisonment. She characterized the disparity between the guideline range and the likely state sentence was “unwarranted.” Later, Judge Brieant sentenced Shuler. Although the judge had intended to impose a 70-month sentence, he instead gave him 40 months, to avoid a disparity with Williams.

The government appealed, and won. Focusing largely Williams, the circuit found the 36-month sentence to be procedurally unreasonable. First, the district judge erred by not treating the guidelines as a “starting point,” and by instead deciding to rely her “personal policy” of conforming to what she viewed as the likely state court sentence. The judge focused on the wrong disparity - § 3553(a)(6) is intended to eliminate disparity on a “national,” not a local, level.

The appellate court was also concerned with basing a federal sentence on the pleading policies of a particular district attorney, since New York has sixty-two of them. Such a practice could easily increase, rather than decrease, sentencing disparities within the federal districts in New York State. Finally, the circuit was concerned about the district court’s reliance on hearsay representations as to what would have happened in state court.

The court also vacated Shuler’s sentence, “if only because” it vacated Williams’. The court identified some other problems, however. While it agreed with Judge Brieant that avoiding disparities among “persons who are engaged in the same misconduct together” is permissible, the court was concerned that he relied too heavily on Williams’ sentence “without making his own assessment of an appropriate sentence.”

The court’s parting shot was to question the “assignment practice” that created Judge Briant’s “predicament.” “[I]t seems difficult on any score to justify the assignment of the Williams and Shuler cases to different judges.” The court suggested that, on remand, one judge take both cases.

On a brighter note, the court speculated that the “real reason” that Judge McMahon imposed such a low sentence was her “understandable desire to ameliorate” the federal crack-v-powder sentencing disparity. It reminded her that she has the discretion to do so on remand.

Fraud Man Out

United States v. Cutler, No. 05-2516(L) (2d Cir. March 17, 2008) (Jacobs, Kearse, Pooler, CJJ)

In this case, the government successfully appealed the exceptionally lenient sentences that Judge Preska imposed on two defendants convicted of a multi-million dollar fraud. The circuit found that the sentences were both procedurally and substantively unreasonable, and remanded the case for resentencing.

Facts

James Cutler was the CFO of a holding company that owned hotels; Sanford Freedman was its general counsel. Together, they helped the company and its principals cheat a number of banks out of more than $100 million. In very brief, the scheme worked like this:

In the 1990's, the holding company restructured its debt, and its principals executed deficiency notes that made them personally liable for those debts. Around the same time, they sold key assets of their company to another company for stock worth more than $100 million. Although they therefore had sufficient resources to meet the deficiency notes, they instead decided to invest that money in another venture, and to trick their creditors into settling for less than the balances due. They hid their assets, then approached the creditors and claimed that they did not have the resources to pay the notes. They also threatened to declare bankruptcy if the creditors did not enter into repayment agreements.

During these negotiations, defendant Freeman repeatedly made false claims about the principals’ supposed financial distress, even while completing paperwork for their new venture that indicated that each was worth more than $30 million. Freeman also assisted in creating a sham foreign investor whom he held out as willing to purchase the principals’ debts from the banks for pennies on the dollar. Cutler’s role was to appease those creditors who were unconvinced by Freeman’s representations by sending them false financial statements.

In the end, the banks capitulated, and lost $106 million, the difference between the balances on the notes and the amount they sold them for.

After a jury trial, Freedman was convicted of bank fraud and conspiracy to commit bank fraud, making false statements to banks, and perjury (for testifying falsely in a related bankruptcy proceeding). Cutler was likewise convicted of bank fraud and conspiracy, false statements, and several counts relating to a $29 million tax fraud (he helped the company’s principals hide their income).

The Sentencings

Cutler

Cutler’s Guideline range was 78-97 months. He moved for a downward departure under Application Note 10 to § 2F1.1, arguing that the loss overstated the seriousness of the offense, and under § 5H1.6, claiming extraordinary family circumstances.

The district court granted the motions, and went down by 15 levels. It knocked off 6 levels on its finding that the loss overstated the seriousness of Cutler’s role (although the court had refused to grant a role reduction under § 3B1.2), conduct and offense. The court also granted a 9-level departure for family circumstances in light of his children’s economic circumstances. These departures brought Cutler from level 28 to level 13, with a range of 12 to 18 months’ imprisonment.

Turning to the statutory considerations, the court again cited Cutler’s lower level of culpability with respect to the bank frauds (but not the tax fraud), the fact that he received “little, if any” direct compensation from the scheme, the need to provide restitution, and his family obligations. She sentenced him to one year and one day in prison. This was within the departure-generated Guideline range, but the judge also indicated that she would give the same sentence under the statute.

Freedman

Freedman did even better. His Guideline range was 103 to 135. The court found that the loss overstated his culpability, and downwardly departed. It also granted a family circumstances departure because of his relationships with his mother-in-law and elderly, mentally retarded brother, and a § 5H1.4 departure due to his age (he was 69) and physical condition. In doing so, the court rejected the BOP’s repeated assurances that it could provide Freedman with adequate care.

The court did not fix an ultimate Guideline range. Instead, it relied solely on § 3553(a). Citing the departure grounds noted above, and the “humiliation” and loss of livelihood associated with Freeman’s prosecution, Judge Preska sentenced him to 3 years of probation.

The Circuit’s Ruling

The circuit identified numerous problems with the district court’s approach, and vacated both sentences.

With respect to Cutler, the circuit first rejected the notion that the loss amount overstated his role or level of culpability. Under § 1B1.3, Cutler was properly held accountable for all of the losses caused by him and his confederates. Here, the $106 million in actual loss was not just foreseeable, it was the explicit goal of the scheme. As far as the circuit was concerned, Judge Preska “misinterpreted the Guidelines,” made “an error of law,” and “clearly erred,” all at the same time. The circuit also noted that the Application Note 10 departure applies in cases where the loss figure is driven by intended loss, not actual loss. The circuit seemed deeply offended that the Cutler's sentence was within the range that would apply to a $70,000 loss. It held that the “implicit finding that a fraud causing losses of more than $100,000,000 is no more serious than one causing losses of little more than $70,000” did not comply with § 3553(a)(2)(A)’s requirement of “just” punishment.

The court next rejected the district court’s finding that Cutler received only a small gain from the scheme. It first held that this is not a ground for a downward departure but also noted that, in any event, the $1.3 million that Cutler pocketed hardly constituted “little, if any, personal gain.”

The court next rejected the district court’s stated view that this type of fraud did not warrant a long sentence because, since imprisonment is itself a deterrent in white collar offenses, the length of the sentence is immaterial. Some of Cutler’s convictions related to tax fraud, and that there is a Guideline policy statement for tax cases that directly contradicts this view. While a court can disagree with a Guideline-based policy consideration, it has to give a sufficient reason for the disagreement, which the court here did not do.

The court was particularly skeptical of the family circumstances departure. Cutler’s children lived with his ex-wife and, while they would likely suffer hardship without his financial support, this case was not outside the “mainstream of family hardships.” More importantly, the circuit believed that there was evidence that Cutler would still be able to support his children while incarcerated if he wanted to. It turns out that he had used some of the proceeds from the scheme to purchase assets that he placed in his second wife’s name, out of reach of his ex-wife and the children: “That Cutler chose to put [assets] into his new wife’s name to provide for her, rather than leaving it in his own name to provide for his children, may be an exceptional circumstance, but it is surely not one that authorizes a downward departure.”

Finally, the court rejected the district court’s seemingly excessive reliance on the need for restitution, out of concern that this would “imply that virtually all defendants who are required to pay restitution in amounts exceeding their net worth should receive short prison terms.”

The circuit had similar qualms about Freedman’s sentence. First, it faulted the district court’s refusal to consider an obstruction of justice enhancement based on Freeman’s initial false statements to IRS investigators. Next, as with Cutler, the court disagreed with the district court’s belief that the loss amount overstated Freedman’s culpability, particularly given Freedman’s “pervasive” participation in the scheme, and his “multi-million-dollar” compensation. On this point, the circuit found a “clearly erroneous assessment of the evidence in the record as to the nature and pervasiveness of [Freedman’s] actions and his substantial financial interest in the success of the frauds.”

The appellate court also rejected the district court’s view that, given Freedman’s humiliation and disbarment, probation would be “just punishment for the offense.” Those consequences - not even “punishment,” in reality - were “hardly unusual,” and thus the district court’s reasoning risked creating unwarranted sentencing disparities.

As with Cutler, the court rejected the family circumstances departure. The disabled brother lived in an assisted living center, and they did not interact frequently in person. Moreover, there was another sibling nearby to help manage the brother’s affairs.

Lastly, the court rejected the downward departure based on Freedman’s age and health, concluding that the district judge made clearly erroneous assessments both of Freedman’s actual condition and of the BOP’s ability to care for him. “[W]e see no support in the record for the district court’s finding that the BOP could not or would not provide that care.”

In the end, for both defendants, given “the procedural errors, the clear factual errors, and the misinterpretations of the § 3553(a) factors” the lenient sentences here were “substantively unreasonable and constituted an abuse of discretion.”

In a short concurrence, Judge Pooler noted that, while she agreed that a remand was necessary, she believed that it was premature to conduct substantive reasonableness review because the lower court had not yet imposed a “procedurally adequate sentence.” Under Judge Pooler’s method, the district court should first be given an opportunity to correct the procedural errors. That sentence, if appealed, would then be subject to review for substantive reasonableness.

Comment

Is this the end of leniency in this circuit? It does not seem so. At least based on the facts as presented by the circuit, these two guys were particularly bad candidates for short sentences. Their conduct was unusually brazen, its consequences unusually serious, and their arguments for mitigation did not come close to outweighing the seriousness of the offense. Even under this decision, then, there is clearly still room for short prison sentences, or even probation, in white collar cases, where the equities genuinely support it.

Have You Hugged A Sex Offender Lately?

United States v. Juwa, No. 06-2716-cr (2d Cir. November 28, 2007) (Walker, Calabresi, Sack, CJJ)

United States v. Baker, No. 05-4693-cr (2d Cir. November 16, 2007) (Summary Order)


The circuit has. Twice, but only once in a published opinion. In Juwa, the court found that a 90-month sentence was procedurally unreasonable because it might have been based on unsubstantiated pending state court charges.

Juwa pled guilty to possessing child pornography, and faced a 24 to 30 month range. At the time of his federal sentencing he was charged in state court with sexually abusing his nephew on multiple occasions, and had worked out a plea agreement under which he would plead to a single count in exchange for a 5-year sentence that would be concurrent to his federal sentence.

At his federal sentencing, however, the district court went way above the agreed-upon range “based on the information before” it about the state case. The court knew that Juwa had not yet pled guilty in the state case but, taking that case into account, sentenced him to 90 months’ imprisonment. The court described this as an upward departure and also imposed it, in the alternative, as a non-guideline sentence.

At times during the sentencing the district judge seemed to recognize that Juwa had agreed to plead to only one count in the state, but the judge also made statements suggesting a finding that Juwa had acted on multiple occasions. In addition, the written judgment noted that Juwa would be pleading guilty in the state to “molesting his nephew for 3 years.”

The circuit reversed. It concluded, at least on this record, that it would have been “improper” for the district court to base the federal sentence on charged conduct alone, a violation of the due process right to be sentenced based on accurate information. Here, apart from the indictment in the state case, there was nothing to establish that Juwa committed any acts other than the one that he had agreed to plead to. The indictment alone could not establish any other facts, even by a preponderance of the evidence. “[A]t sentencing, an indictment or charge within an indictment, standing alone and without independent substantiation, cannot be the basis upon which a criminal punishment is imposed. Some additional information, whether testimonial or documentary, is needed to provide evidentiary support.”

Here, because there was “uncertainty both from the sentencing transcript and the written order” about whether, and to what extent, the sentencing enhancement was based on the court’s assumption that Juwa had engaged in multiple instances of abuse, it remanded the case for clarification.

In Baker, a summary order, the court, remarkably, vacated a within-guideline sentence as unreasonable, an apparent first in this district.

Baker faced a 108-month guideline minimum for transporting child pornography, and that was the sentence he got. He had argued strenuously for a below-guideline sentence, but the district court made it clear “from the outset that it would only consider a sentence within” the range. It did not say why a 9-year guideline sentence was appropriate, nor did it say why a the 5-year mandatory minimum sentence was not. Moreover, the court did not specifically respond to any of Baker’s arguments for a lower sentence, arguments that the circuit found so compelling that the district court, “at the very least,” should have explained why it was rejecting as them as the basis for a non-guideline sentence. Most significantly, the also court concluded that the district court’s statement that it had considered all of the 3553(a) factors was not enough, because it was obvious that the court really had not done so.

The mystery of Baker is whether the court viewed the sentence as substantively unreasonable, or procedurally unreasonable, or both. The disposition of the case - remanding to the district court to provide reasons for the sentence - suggests that this was a procedural unreasonableness case. But the cases the court cites as the basis for the remand, Sindima, and Rattoballi, are substantive unreasonableness cases. Curious, aint’ it?

Follow The Bouncing Anders

United States v. Whitley, Docket No. 05-3359-cr (2d Cir. September 17, 2007) (Straub, Pooler, Parker, CJJ) (per curiam)

Once – or rather twice - again, in these consolidated appeals, the Circuit has bounced Anders briefs. Here the court was dissatisfied with the briefs’ treatment of the reasonableness of the sentence. One “merely recite[d] the legal standard for procedural reasonableness and desribe[d] the sentencing process” but did not analyze either the procedural or substantive reasonableness of the sentence itself. The other made conclusory statements about the reasonableness of the sentence but did not analyze the district court’s sentencing determinations or the sentence itself.

After reviewing the purposes of Anders briefs, the court held that such briefs must include a discussion of both the substantive and procedural reasonableness of the sentence, reminding the bar that there is no presumption of reasonableness for Guidelines sentences in this Circuit.

What is the lesson here? It will be a whole heck of a lot easier if appellate counsel avoids filing an Anders brief. Try not to do so unless the client got the sentence he asked for, or the mandatory minimum, or the appeal was waived by a plea agreement.