Cash Cow

United States v. Wagner-Dano, No. 10-4593-cr (2d Cir. May 14, 2012) (Winter, Livingston, CJJ, Rakoff, DJ)

Melissa Wagner-Dano was a bookkeeper in upstate New York, where she worked for a small town and two large dairy farm cooperatives. She stole more than $1 million from her employers through unauthorized withdrawals from their bank accounts, using used the money for various personal projects. Wagner-Dano covered her tracks by transferring funds among the employers’ accounts. As the scheme unraveled, she blamed the missing funds on computer errors, then repaid some of the money from her personal bank account. Finally, she threw in the towel, admitted her crime and pled guilty to wire fraud.

On appeal, she claimed that several errors in her presentence report rendered her 78-month, top-of-the-range sentence procedurally unreasonable. Wagner-Dano had detailed these objections to the Probation Department, which had explained them in the addendum to the report, but at sentencing her counsel referred to - but did not elaborate on - them.

The circuit concluded that some of these objections were resolved by the district court’s adoption of the findings of the presentence report. Others, however, were at least arguably not, because they involved more complex discussions of Wagner-Dano’s motivations at various stages of the criminal activity and coverup. Nevertheless, the circuit concluded that Wagner-Dano’s failure to press these claims at the sentencing hearing limited the court’s review to plain error: "We review for plain error where, as here, an appellant asserts that the district court neglected to address an objection to the PSR in violation of Rule 32(i)((B), but that appellant failed to alert the district court of this procedural issue after the district court made its findings." In reaching this result, the court extended existing precedent that, where an appellant argues for the first time on appeal that the district court failed to consider the § 3553(a) sentencing factors, appellate review is for plain error only.

The circuit noted that if "the defendant or the Government believes that a particular factual issue is material and the district court neglects to address the issue at sentencing, it is not difficult - indeed, it should be intuitive - to bring this procedural error to the district court’s attention." In so holding, the court also seemingly abrogated a line of cases under the precursor to Rule 32(i)(3), the 1983 through 1994 version, which was codified as Rule 32(c)(3)(D). But the court noted that subsequent versions of the relevant portion of Rule 32 had been specifically intended to reduce the burdens on district courts and confine the purpose of the rule to resolving factual issues that were material to the sentence itself. And the court also noted that it has not recently remanded cases to remedy an unpreserved "technical violation" of Rule 32(i)(3).

Applying the plain error standard here, the court affirmed, since none of the matters that Wagner-Dano claimed the district court failed to address would have been likely to affect her sentence.

Comment: This decision once again demonstrates the importance of thorough, focused advocacy at sentencing, particularly where an appeal is likely.

Ratio Days

United States v. Keller, No. 07-3330-cr (2d Cir. August 14, 2008) (Miner, Cabranes, CJJ, Berman, DJ)

This case provides an important clarification of the procedure that the court set out earlier this year in United States v. Regalado, 518 F.3d 143 (2d Cir. 2008). In that case, the court held that a remand was warranted on appeals of pre-Kimbrough crack sentencings where the defendant did not ask for a variance based on the 100-to-1 penalty ratio, because there would be no way for the circuit to know whether the district court would have imposed a different sentence if it knew that it had the discretion to do so.

Here, the district judge gave a two-level sentence reduction to match the anticipated amelioration of the crack sentencing guidelines, but did not specifically acknowledge its discretion to consider the crack-powder sentencing disparity as the basis for imposing a non-guideline sentence. The circuit concluded that a Regalado remand was nevertheless necessary. In crack cocaine cases, unless the record “unambiguously demonstrates that a district court was aware of the full extent of its discretion and declined to exercise it, a remand [is] appropriate.”

CASH AS CACHE CAN

United States v. Jones, No. 05-5879-cr (2d Cir. June 24, 2008) (Leval, Cabranes, Raggi, CJJ)

In 2004, Jones was present in a “gatehouse” - an apartment used solely for the purpose of selling drugs - when Rochester police executed a search warrant. The officers found, inter alia, twenty-two grams of crack residue and $883 in cash hidden in the apartment. Jones admitted “selling a little.” Despite this admission, the jury convicted him only of simple crack possession.

At sentencing, the court held him accountable for possessing forty-seven grams of crack. This comprised the twenty-two grams of crack residue, plus an estimated twenty-five additional grams, which was based on the probable amount that Jones had sold to realize the $883.

The Appeal

Drug Quantity

On appeal, Jones argued, primarily, that it was unreasonable for the court to translate the money into drugs for the purposes of calculating drug quantity under the sentencing suidelines, an issue that, surprisingly, the court had never before addressed in a precedential opinion. It did so here, however, and affirmed.

The court joined eight other circuits to conclude that where the sentencing court finds by a preponderance of the evidence that seized currency is the proceeds of drug trafficking, it may “consider the market price for the drugs in which the defendant trafficked in determining the drug quantity represented by that currency.” Here, there was no error in the district court’s findings that: (1) Jones possessed the money; (2) the money was drug money, and (3) that, based on the price an informant had recently paid for crack from that same apartment, the $883 would have purchased about twenty-five grams.

Kimbrough to the Rescue

The court also held, however, that the district court committed a procedural error by apparently treating the guidelines for crack cocaine as presumptively reasonable, without recognizing its discretion to reject the notorious 100 to one ratio. Although the record was somewhat ambiguous, and the sentencing occurred before Rita, Gall and Kimbrough were decided, the court of appeals gave Jones the benefit of the doubt, and vacated the sentence.

Comment

This is a great decision, filled with unusually strong language about the sentencing court’s discretion in general and the crack cocaine guidelines in particular. Put it on your summer reading list!

Quantum Mechanics

United States v. Martinez, No. 06-5502-cr (2d Cir. May 9, 2008) (per curiam).

In this brief per curiam, the court reaffirms that there is only one quantum of proof necessary for sentencing enhancements post-Booker - the preponderance standard.

Specifically, the court rejected Martinez’ argument that where the enhancement requires the sentencing judge to determine that the defendant committed a separate offense (here, the 4-level bump under § 2K2.1(b)(6) for using a gun in connection with another felony offense), those facts should be proven beyond a reasonable doubt. The circuit noted that the district court did not sentence Martinez for the other offense; it merely determined that the separate offense was relevant to the sentence to be imposed on the offense of conviction, and that Martinez did not receive a sentence longer than the applicable statutory maximum.

Rejection Letter

United States v. Negron, 06-3614-cr (2d Cir. April 24, 2008) (Jacobs, Kearse, Pooler, CJJ) (per curiam)

Defendant Silverio, who was sentenced to 272 months (22 years, 8 months) in prison, had been offered, and rejected, a plea agreement with a binding sentencing recommendation of 17 years. On appeal, he argued that district court erred in refusing to consider the terms of the rejected agreement at sentencing.

Not surprisingly, the appellate court disagreed. There is nothing in § 3553(a) - or circuit precedent - that requires a district court to do so. Accordingly, finding no substantive or procedural defect with the sentence, the court affirmed.

Consecutive Privilege

United States v. Donoso, No. 07-0635-cr (2d Cir. April 3, 2008) (McLaughlin, Hall, CJJ, Sand, DJ) (per curiam)

Resolving an open question in this circuit, the court here holds that, under 18 U.S.C. § 3584(a), a district judge cannot order the federal sentence to run consecutively to another sentence that has not yet been imposed.

Facts: Richard Donoso violated his federal supervised release by committing a state offense. He pled guilty in state court, then came into federal court and admitted the supervised release violation. Judge Spatt sentenced him to 24 months’ imprisonment and ordered it to run consecutively to the state sentence. Donoso was not sentenced in the state case, however, until the next day. A few days later, Judge Spatt recalled the case, questioning whether he had the power to impose a consecutive sentence before the state sentence had been imposed. Invoking Fed.R.Cr.Proc. 35(a), and over objection, he vacated the sentence, then reimposed it, ordering it to run consecutive to the state sentence that Donoso was now actually serving.

The Appeal: On Donoso’s appeal, the circuit held that Judge Spatt was correct in his belated realization that he could not impose a consecutive federal sentence before the state sentence had been imposed. Title 18 U.S.C. § 3584(a) provides that, if a term of imprisonment is imposed on a defendant who is “already subject to an undischarged term of imprisonment,” those terms “may run concurrently or consecutively.” Under the circuit’s reading of this section, however, where, as here, sentence has not yet been imposed in the state case, the defendant is not “already subject to” that term of imprisonment, thus the statute does not apply.

Comment: This case, almost certainly incorrectly decided, gives undeservedly short shrift to very important issues regarding statutory interpretation and sentencing policy.

The first, and most important, problem here is that underlying statutory premise of this decision is wrong. The circuit concluded that § 3584(a) did not apply to Donoso when he was awaiting sentencing on his state case because he was not yet serving that sentence. But that is not what the statute says. The statute applies if the defendant is “already subject to” another a sentence; it does not say that he has to be “already serving” it. And a person can clearly be “subject to” a sentence even if he is not yet serving it. Donoso, for example, was in custody in New York State awaiting imposition of sentence on a charge that he had already been convicted of. It seems perfectly clear that he was in every respect “already subject to” that sentence, and thus that 3584(a) should apply to his situation. After all, if Congress meant had “already serving,” as opposed to "already subject to," it could easily have said so. At a minimum here there is an ambiguity that should be tested under the rule of lenity.

A second aspect of this decision that also seems wrong - or at least warrants more discussion than this brief per curiam gave it - is the premise that 3584(a) is the only authority for imposing concurrent or consecutive sentences and that, if it does not apply, all the district court can do is impose sentence and not address the question. There is a good argument that § 3553(a) itself confers concurrent/consecutive authority. That section begins with very broad language about the imposition of sentence that can easily be interpreted to include the decision about whether the sentence should be concurrent or consecutive. Also, § 3553(a)(5)(A) requires the sentencing court to consider any pertinent Guidelines policy statements, and as it happens, there is a policy statement that deals with this issue. Guidelines section 5G1.3(c), which authorizes concurrent, consecutive or partially concurrent sentences, is expressly designated a policy statement, and is broader than § 3584(a). While the statute applies only where the defendant is “already subject to” an undischarged term of imprisonment - whatever that means - the policy statement applies in any case “involving” an undischarged term of imprisonment. Donoso, as noted above, was not serving his undischarged state sentence when he was first sentenced federally. But his case certainly “involved” an undischarged term of imprisonment.

Why does the blog care about this? Because, although the court does not say so, this decision seems to compel the conclusion that a district court cannot order the federal sentence to run concurrently to a state sentence that has not yet been imposed, which is something that defendants frequently ask for. Indeed, some defendants try very hard to get sentenced in their federal case before sentencing in their state case so that they will not receive an increased criminal history score, but still want the federal judge to order a concurrent sentence. This decision spells trouble in that kind of case.

Final Comment: This case is also maddening for a completely different reason. Donoso got the statutory maximum for his supervised release violation, consecutive to his state sentence. Both of those decisions were discretionary and subject to reasonableness review. Why is there no mention of the reasonableness of the sentence on this appeal? The blog simply cannot imagine that he that he did not raise the issue.

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.

The “Regalado Remand”

United States v. Regalado, No. 05-5379-cr (2d Cir. March 4, 2008) (Jacobs, Pooler, Sack, CJJ) (per curiam)

At last, the circuit has told us what to do in light of Kimbrough. And the answer is, in essence, a Crosby remand.

Regalado received a 262-month crack sentence, the bottom of the Guideline range (he was not a career offender). The sentencing judge said nothing about the 100-to-1 crack/cocaine disparity and the defendant never raised it. Due to this silence, the appellate court concluded that it could not "tell whether the district court would have exercised its now clear discretion to mitigate the sentencing range produced by the 100-to-1 ratio." To solve the problem, the court decided to import the "Crosby mechanism" to crack cases.

Specifically, where a "defendant has not preserved the argument that the sentencing range for the crack cocaine offense fails to serve the [statutory] sentencing objectives . . . , we will remand to give the district court an opportunity to indicate whether it would have imposed a non-Guidelines sentence knowing that it had the discretion" to do so. "If so, the court should vacate the original sentence and resentence the defendant. If not, the court should state on the record that it is declining to [and] provide an appropriate explanation." If the defendant again appeals, that sentence will be reviewed for reasonableness.

Comment

This is a wonderful opinion, filled with great language about a sentencing court’s discretion. It also has some really helpful language about plain error in sentencing cases, that, hopefully, the court will remember in other contexts.

The only remaining puzzle is what to call this kind of remand: A "Crosby/Kimbrough" remand? How about a "Cros/Kim"? This blogger, always a fan of alliteration, votes for the "Regalado Remand."

The Government Giveth and the Government Taketh Away

United States v. Dominguez, No. 05-7005-cr (2d Cir. February 15, 2008) (Miner, Sack, Hall, CJJ)

Carol Dominguez faced 240-months in prison: a ten-year crack minimum that was doubled because of her prior conviction. The government moved for a downward departure under 5K1.1 and 18 U.S.C. § 3553(e), then asked the court to sentence her somewhere within a 151 to 188 month range. At sentencing, the judge granted the government's motions, and then considered mitigating information from Dominguez’ family, friends, employers and the defendant herself. The judge indicated that he believed he had the “discretion to sentence you as to what I feel would be fair and reasonable under the circumstances.” He said that he had “reviewed and considered all the pertinent information including but not limited to the presentence investigation report, submissions by counsel the factors outlined in 18 U.S.C. Section 3553 and the sentencing guidelines” and sentenced her to time served - 464 days - a 93% reduction from the mandatory minimum.

The government appealed, and the circuit reversed, finding fault with the district court’s procedures. Here is what the court said should happen on remand. First, the district court must determine the correct Guideline range, which here is 240 months, the mandatory minimum. Then, since section 5K1.1 does not really apply here - it does not authorize departures below a mandatory minimum - the court must consider the government’s motion under § 3553(e), under which “any reduction may be based only on substantial assistance to the government and on no other mitigating considerations” (emphasis added). On this point, an open question here, the court joined the Fifth, Eighth and Ninth Circuits. The court ended by suggesting that the 5K1.1 factors would be “instructive in determining how much of a departure below the statutory minimum is appropriate,” even though that section does not itself apply.

Comment: This is a very strange opinion. The circuit now seems to believe that when sentencing cooperators who face a mandatory minimum, a court cannot apply § 3553(a); it can base its decision only on the extent of the cooperation. That does not really make much sense, since § 3553(a) obviously applies in all sentencings.

Russian Revolution

United States v. Verkhoglyad, No. 05-4210-cr (2d Cir. February 14, 2008) (Cabranes, Raggi, CJJ, Berman, DJ)

Oleg Verkhoglyad was a Russian mobster who repeatedly received lenient treatment. First, after cooperating in a 1998 extortion case, he received a 5K1.1 departure. Six months after getting out of jail, he violated his supervised release by committing a multitude of new offenses. He pled guilty to the supervised release violation and a new felon-in-possession charge, then talked his way into another cooperation agreement. After nearly four years of working with the government, he received another 5K letter. This time, he got 4 years’ probation on the gun charge and 3 years of supervised release on the supervised release violation. Within weeks of his sentencing, he violated his supervision by using marijuana and leaving the district without permission. This time, however, his luck ran out. The district judge slammed him, giving him 57 months’ imprisonment, the top of the range he originally faced on the gun charge, even though the Guidelines recommended only 5 to 11 months.

He appealed this sentence, claiming it was both procedurally and substantively unreasonable, but the circuit affirmed. On its surface, the opinion treads no new ground, since it was obvious that the district court did all that 3553(a) requires.

However, lurking below the surface of this opinion is a mini-revolution. Just last year, in United States v. Sindima, 488 F.3d 81 (2d Cir. 2007), the court reminded us all that the primary purpose of a violation of probation sentencing is to punish the breach of trust, and not the conduct itself. Here, the court partially overrules Sindima, without really saying so, by holding that a probation violation sentencing is in fact a resentencing on the underlying offense. This decision is thus clearly intended to make above-Guideline sentences easier to impose in probation violation cases, despite the seemingly opposite approach the court took in Sindima. Worse still, the court does not really deal with the tension it has created with Sindima, other than to assert that Sindima was not supposed to “ignore the fact that revocation of probation requires a defendant to be resentenced on the crime of conviction, and not simply on the breach of trust.”

Permanent Waive

United States v. Quinones, No. 04-5554 (2d Cir. December 28, 2007) (Winter, Cabranes, Raggi, CJJ)

This case has lengthy discussions of two important issues. It turns out that the one that has received the less press is actually the more interesting of the two, so we’ll begin with that.

1. Sentencing Error Waived

Facts: In this capital case, the defendants initially faced three counts that exposed them to the death penalty. Two related to murder in aid of racketeering under 18 U.S.C. § 1959; for these, a life sentence was mandatory if death was not imposed. The defendants were acquitted of these counts.

They were convicted only of murder in relation to a continuing drug enterprise (“CCE”) under 21 U.S.C. § 848(e). At the time, that section provided for a mandatory minimum sentence of 20 years’ imprisonment and a maximum of life if death was not imposed. Nevertheless, the defendants repeatedly asserted, both before the jury and to the district court, that life without parole was the only legal option if they were acquitted of death. While this was true under the then-mandatory Guidelines, it was not true under the statute. On appeal, they asserted that they should be resentenced due to the district court’s mistaken belief that a life sentence was mandatory.

Holding: The circuit disagreed. Although it recognized that the district court erroneously believed that life sentences were mandated, and not just by the Guidelines, the court concluded that the judge had not “misread or misunderstood” the statute. Rather, it found that “a more likely explanation” was that “the defendants agreed to life imprisonment as the only possible non-capital sentence to strengthen their argument to the jury, at the penalty phase of this case, that justice did not demand their deaths.”

The circuit noted that, even after the defendants were acquitted of the racketeering counts for which life truly was mandatory, they continued to “insist” that the jury be charged that the only two sentencing possibilities on the CCE count were life imprisonment or death, and asked the court to emphasize this in its instructions, which it did. Moreover, the defendants then repeatedly argued this to the jury. Characterizing this as a “tactical” decision, the court held that the appellate claim that the district court erred in believing that a life sentence was required was waived - “truly” waived, such that not even plain error review would apply - and not merely forfeited. “A finding of true waiver applies with even more force when, as in this case, defendants not only failed to object to what they now describe as error, but they actively solicited it, in order to procure a perceived sentencing benefit.”

The court concluded that it was “no doubt that it was a tactical decision” by the defense attorneys to agree that a life sentence was the only alternative to death, and not a mistake, citing numerous treatises that have observed that capital juries are less likely to impose the death penalty if they believe that the defendants will not be released from prison. The court also noted that this tactical decision was a “reasonable” one, likening it to accepting a Rule 11(c)(1)(C) plea.

Comment: This is a tough case, because it really does seem that both the district court and the defense attorneys misread the CCE statute. It is, after all, a confusing provision that does mandate a life sentence in some circumstances, although, oddly enough, not in murder cases. The circuit is clearly off the mark in finding that the district judge did not misread the statute, since the judge repeatedly said that the section mandates a life sentence, and never said that it reached this conclusion based on the defendants’ offer to accept a life sentence. Nevertheless, the court is on firmer ground in finding that the defendants waived their appellate claim by inviting the error in the district court, since they clearly did so.

By the way, it is no accident that the court goes to such lengths to characterize the actions of defense counsel as “tactical” and “reasonable.” These findings, unnecessary to the disposition of this appeal, are an obvious effort to preempt any future claim that the defense attorneys were ineffective. Although the court never mentions Strickland, it is clearly the subtext of this portion of the decision.

2. Jury Selection

This case also has an interesting discussion of jury selection issues in capital cases. At trial, the district court dismissed a few jurors for cause based solely on their responses on written questionnaires that indicated, in essence, that they would never impose the death penalty in any case. The appellate court strongly urged district courts, particularly in capital cases, to question prospective jurors before dismissing them for cause, but refused to characterize this as a constitutional mandate. It also noted that any error here was rendered harmless by the jury’s refusal to impose the death penalty. The court rejected, at least on these facts, the notion that this type of error could produce a jury that was more likely to convict at the guilt phase. Here, the jury acquitted the defendants of two of the three capital counts.

Blurry Vision Leads to Clear Error

United States v. Lin Guang, No. 05-4724(L)-cr (2d Cir. December 13, 2007) (McLaughlin, Wesley, CJJ, Sessions, DJ)

Two defendants in an extortion case raised a host of garden-variety challenges to their conviction, to little effect, and to their sentence, one of which prevailed.

During one of the extortions, a victim was beaten and a caustic substance was sprayed into his eyes, briefly blinding him. Once he rinsed it out, his eyes felt better, but from that point on he found it painful to read for long periods of time, and thus had stopped reading the newspaper. Based on this account, the district court imposed a six-level Guideline enhancement for permanent injury, which is defined as “loss or substantial impairment of the function of a bodily member, organ, or mental faculty that is likely to be permanent.”

The circuit held that the district court’s finding that the impairment, as described, was both substantial and permanent, was clearly erroneous. While it was clear that the victim suffered a substantial impairment of his eyesight at the time of the assault, his testimony that, having recovered, it still hurt his eyes to spend time reading did not constitute a substantial impairment that was likely to be permanent. The case was remanded for resentencing.