Summary Summary

Another crop of three:

In United States v. Reed, No. 09-2093-cr (2d Cir. May 5, 2011), the court vacated special conditions of supervised release requiring the defendant to participate in drug and alcohol treatment. He committed the offense of conviction while in prison, without access to drugs or alcohol, and there was no evidence that alcohol or drugs had any relation to its commission.

In United States v. Cedeno, No. 09-1857-cr (2d Cir. May 2, 2011), the district court erroneously charged the jury that, in prosecution under 18 U.S.C. § 924(c), "as a matter of law, a gun is a firearm." Not all guns are firearms "because, for instance, a BB gun is not a 'firearm.'" But, here, the error was harmless.

In United States v. Stroman, No. 10-0962-cr (2d Cir. April 26, 2011), the court considered whether a police officer conducted an "interrogation" of the defendant, for Miranda purposes, by telling him not to speak then showing him video surveillance footage. The court noted that this conduct "raises concerns that the police may be able to sidestep Miranda's safeguards" but did not conclusively rule on whether there was a Miranda violation, instead holding that any error in admitting the defendant's statements was harmless.

Beating Disorder

United States v. Wells, No. 10-1266-cr (2d Cir. April 28, 2011) (Kearse, Sack, Katzmann, CJJ)

The defendants here, Wells and Rhodes, both former prison guards, were convicted of covering up the beating of a prisoner at the Queen Private Correctional Facility (“QPCF”). The episode began when the prisoner commented on the appearance of a female guard in Wells’ presence. Wells beat the prisoner, and the beating was witnessed by Rhodes and three other guards. The QPCF immediately began an internal investigation, and the witnesses, at Wells’ urging, filed false reports. Later, Wells and Rhodes were interviewed by an agent of the Office of the Inspector General and lied to her about what happened.

After a jury trial, Wells was convicted of five offenses relating to obstruction of justice, witness tampering and the making of a false statement. Rhodes was convicted of obstruction of justice and making a false statement.

On appeal, they challenged their convictions for obstruction of justice under 18 U.S.C. § 1519, which requires proof of conduct “intended to obstruct the investigation or proper administration of a matter within the jurisdiction of a federal agency.” The circuit affirmed.

The defendants first claimed that the government failed to prove a sufficient “nexus” between their conduct and an official proceeding, as required under some obstruction statutes. But § 1519 makes clear that no such nexus need be proven. All the statute requires is proof of an “intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States.”

The court also rejected the argument that the statute did not apply because the defendants were employed by the private company that operated the QPCF. The QPCF was under contract with the U.S. Marshals Service, an agency within the Department of Justice, to house federal prisoners. And the DOJ has jurisdiction and authority to investigate allegations against correction officers at both publicly and privately run prisons.

Finally, the court rejected the claim that there was no evidence that the defendants knew that their statements would be submitted to the DOJ. Knowledge of a pending federal investigation or proceeding is not an element of the offense.

Stalking Points

United States v. Curley, No. 09-3314-cr (2d Cir. April 25, 2011) (Jacobs, Wesley, Chin, CJJ)

In this circuit, it is a fairly rare occurrence for a conviction to be vacated based on a Rule 404(b) error. But here, James Curley, convicted of interstate stalking offenses, will get a second bite at the apple.

Background

In 2006, Curley’s marriage to his wife, Linda, dissolved, and his behavior became increasingly bizarre. After serving her with divorce papers, he began following her, and recruiting family members to do so, as well. Linda obtained custody of their children and an order of protection. Curley did not take this all too seriously, however, since then secretly installed a GPS device on her car - a friend tracked her movements on the internet and forwarded the information back to Curley. Linda only found out about it when she had an automobile accident in New Jersey and a mechanic discovered the GPS device. This prompted Curley to drive from New York to the shop, where he lied about his identity and reasons for the visit.

In 2008, he was charged with two counts of interstate stalking and one count of interstate violation of a protective order. At trial, the district court admitted the following evidence under Rule 404(b): four incidents in which Curley was violent to Linda; (2) an incident some sixteen years earlier in which Curley’s brother, Michael, beat her and Curley told her not to report it to the police; an incident a few years later in which Michael was arrested for resisting arrest and, under pressure from Curley and Michael, Linda testified falsely at two subsequent trials; evidence relating to a 2008 traffic stop of Curley, in which he was allegedly driving a stolen rental car from which three rifles, ammunition, a bulletproof vest and ski mask, and a “last will and testament” were recovered.

As the trial unfolded, Linda testified about Curley’s prior violence and the incidents with Michael, including the forced perjury, but the district judge did not give a limiting instruction. Before the traffic stop evidence, however, the court instructed that the evidence was being offered for the “very specific purpose” of determining Curley’s “intent back at the time of the” offense. In its final charge, the court told the jury that the traffic stop evidence could be considered only on the issue of Curley’s intent, while the other evidence went only to Linda’s “reasonable fear.”

The jury convicted Curley, and he was sentenced to an above-Guideline term of sixty-three months’ imprisonment.

The Circuit’s Decision

The circuit analyzed the 404(b) evidence in three groups - Curley’s violence towards Linda; everything to do with Michael; and the traffic stop evidence. It found an abuse of discretion with respect to the latter two groups.

1. Curley’s Violence Towards Linda

First, the court found that the district court did not err in admitting Curley’s past abuse of Linda. Some of that abuse was so close in time to the charged conduct that it was “inextricably intertwined” with it, and hence “directly relevant” to Curley's intent and Linda's fear.

The abuse that occurred in earlier years was “also relevant and not unfairly prejudicial.” When a defendant is charged with domestic violence, a “history of domestic violence is relevant to show intent to harass or intimidate.” And the temporal remoteness did not preclude a finding of relevancy, since the acts collectively demonstrated a “pattern of activity that continued up to the time of the charged conduct.”

2. Linda’s Interactions with Michael

The district court erred, however, in permitting Linda to testify that Michael beat her and pressured her to lie about his resisting arrest case. This evidence was not sufficiently similar to the charged crimes to allow the jury to reasonably infer Linda’s fear, particularly since Curly was not charged with conspiring with his brother to harass or intimidate Linda. Moreover, Michael’s activities did not “parallel” Curley’s, since he was not involved in any of the charged conduct. This evidence accordingly had little probative value - one episode occurred sixteen years before the charged crimes and the other twelve - and posed a “high risk” that “evidence of Michael’s conduct would unfairly prejudice Curley.” It had no “real purpose other than to show that Michael - and not Curley - had a bad character” and thus improperly focus the jury on Curley’s “clan,” rather than on the allegations in the indictment.

Nor was the prejudice mitigated by the limiting instruction. The instruction was “not sufficient, given the low probative value of the evidence and the high risk of prejudicial effect.” The impact of the limiting instruction was also blunted by its poor timing; it came only at the end of the case - there was no contemporaneous instruction.

3. Curley’s 2008 Traffic Stop

The district court also erred in admitting evidence of the traffic stop. This evidence was admitted to show Curley’s intent and Linda’s fear, although the stop occurred some fourteen months after the charged conduct. While subsequent acts can be admitted under Rule 404(b), the temporal difference may impact the probative value of the evidence. Here, there was insufficient similarity between the traffic stop and the charged crimes. Indeed, there was no evidence that Curley’s activities on the day of the traffic stop were “related to or direced at” Linda at all. Relating the traffic stop to Linda required a “tenuous and unduly long chain of inferences without any further evidentiary guidance.” The risk of prejudice was also very high because the evidence was “significantly more sensational and disturbing than the charged crimes.” The circuit was particularly concerned about the “introduction of guns into the trial.” This was “especially troubling because it tended to show Curley was more violent and disturbed than he appeared from the other evidence.”

Here, as well, the court also found that the limiting instructions were not a cure. There was an “overwhelming probability that the jury” would be “unable to follow the court’s instructions” and the evidence was “devastating to the defense," since its primary effect was to show Curley’s “bad character” and “incite the jury.”

4. Harmless Error

The court also held that the erroneous admission of the Rule 404(b) evidence affected the outcome. “The record does not provide us with fair assurance that the erroneously admitted evidence ... did not substantially sway the jury.” The court’s reasoning is unsatisfyingly sparse, however - it simply repeats its prior holding that the 404(b) evidence was prejudicial, and notes that the government relied on it in summation.

Summary Summary

Here are four recent summary orders of interest.

In United States v. Durham, No. 10-1046-cr (2d Cir. April 12, 2011), a supervised release violation case, the defendant claimed that his CJA lawyer was ineffective due to a conflict of interest. The circuit observed that in a VOSR the right to counsel is "statutory, not constitutional," and thus that "the scope of [the] right to effective assistance of counsel is arguably an open question in our Circuit." In the end, however, the court did not resolve the question because the factual basis for the conflict of interest claim was not sufficiently developed.

In United States v. Monk, No. 09-3618-cr (2d Cir. April 11, 2011), the court vacated a drug sentence because the district court's findings of fact were insufficient to support the imposition of the two-level gun enhancement. The court relied on evidence that the defendant had possessed guns in the past, and that ammunition was seized at the time of his arrest. The circuit agreed that this evidence, although it proved that "Monk at some point possessed a gun," failed to "establish the necessary connection between the gun and the offense conduct" and that to affirm the enhancement on these facts would "be expanding [its] scope ... in an unprecedented manner."

In United States v. Shay, No. 10-1543-cr (2d Cir. April 6, 2011), the court vacated a long, but within-Guideline, child pornography sentence because the district court "did not have the benefit of" Dorvee when the sentence was imposed, and the "Guidelines calculation and offense conduct in Dorvee's case were strikingly similar to those" here. This similarity made it "appropriate, at a minimum, to vacate the judgment and remand" so that the "district court can consider the potential effect or Dorvee on this case in the first instance," and decide whether the sentence it originally imposed remains appropriate.

Finally, in United States v. Windle, No. 10-620-cr (2d Cir. April 5, 2011), the court found plain error in an illegal restitution order. The district court improperly imposed a "lump sum" restitution order without identifying the victims or their actual losses.

PC World

United States v. Perez-Frias, No. 10-1401-cr (2d Cir. March 31, 2011) (Jacobs, Calabresi, Lohier, CJJ) (per curiam)

Pedro Ruben Perez-Frias appealed his 42-month, below-Guideline illegal reenty sentence, arguing that it was substantively unreasonable. The circuit affirmed.

His case presented a particularly unsympathetic set of facts. In 1995, Perez-Frias was convicted of a drug-related manslaughter. He was selling marijuana at the time, and told his friends that he was having trouble with a rival dealer. This inspired someone else to kill the rival. Perez-Frias received a 7-to-21-year state sentence, and served about 14 years before being paroled to immigration authorities, who immediately deported him. He returned to the United States in August of 2009 and, two months later, was arrested for possessing marijuana. Within a few months he was in federal custody facing an illegal reentry charge.

Perez-Frias’ primary argument at sentencing was that a Guideline sentence was greater than necessary to satisfy § 3553(a). The sentencing judge disagreed, but granted his request for a four-month reduction to account for the uncredited time that Perez-Frias was in federal custody on a writ. The Guideline range was 46 to 57 months’ imprisonment, and the court imposed a 42-month term.

The circuit began by noting that it is “difficult to find that a below-Guidelines sentence is unreasonable,” although, in context, it seems that the court will find this difficulty only when assessing a defendant’s claim that the sentence is unreasonably high, and not when assessing a prosecutor’s claim that a below-Guideline sentence is unreasonably low. Here, according to the circuit, the district court’s assessment of the nature and circumstances of the offense and the defendant’s history and characteristics supported the sentence it chose.

Perez-Frias challenged the 16-level enhancement that he received for the manslaughter conviction as one not supported by “specific empirical data.” This is a common argument made in illegal reentry cases, and here the court pretty much shot it down. There is “no such flaw in the reentry Guideline.” Rather, the 16-level enhancement was “based on the Commission’s own determination that these increased offense levels are appropriate to reflect the serious nature of these offenses.”

Relatedly, Perez-Frias argued that the 16-level enhancement was unduly harsh because the illegal reentry itself is a non-violent act. The court rejected this, too. The guideline is not unreasonable merely because it produces an offense level that is equal to or greater than that of certain violent crimes.

Finally, Perez-Frias deployed another commonly raised argument: that the lower sentences imposed in “fast-track” districts showed that non-fast-track sentences are longer than necessary to achieve the statutory goals. The circuit disagreed because “defendants in fast-track districts are not similarly situated to defendants in non-fast-track districts.”

Comment

For those with a lot invested in illegal reentry cases - like federal defenders - this is a disturbing opinion, particularly on the issue of the empirical basis for the 16-level bump.

There has been a lot written, much of it quite compelling, that establishes that the Commission’s choice of 16-level bump was, in essence, random, and was not based on any systematic empirical study. And the quoted material that the court relies on here to find otherwise is not really an answer. That material comes from the Commission’s justification for the enhancement, and establishes only that the Commission believed that illegal reentrants with serious past convictions deserved a higher offense level. But it does nothing to explain why the Commission selected 16 levels, and not some lower number, and certain does not in any way show that the number, or even the concern behind it, was the product of a real empirical - or indeed any - investigation.

Others have observed that the 16-level bump seems to have been intended to coordinate with the statutory maximum of twenty years. But under Kimbrough that is an additional reason to give less deference to a determination by the Sentencing Commission. This opinion does not address that aspect of the enhancement at all.

Finally, as for fast-track, there is an issue that the Circuit has had before it many times but has not yet resolved: the claim that the disparity between the sentences imposed in fast-track districts and non-fast track districts is “unwarranted” under 18 U.S.C. § 3553(a)(6). Although the government will likely trot out this case in answer to that argument, in fact, this case does not shut that particular door. Its holding that the fast-track disparity does not render non-fast-track sentences longer than necessary is not a holding that such disparities can never be “unwarranted.”

Pill Pains

United States v. Quinones, No. 09-4361-cr (2d Cir. March 29, 2011) (Walker, Straub, Katzmann, CJJ)

Antonio Quinones and his son, Herman, were convicted of conspiring to distribute controlled substances. Antonio was also convicted of a money laundering conspiracy. In this opinion, the Court tries to make sense of a confusing Supreme Court money laundering case and displays a rare difference of opinion over a conscious avoidance jury instruction.

Background

Antonio Quinones entered the internet pharmacy business in 2002 and, for several years, ran websites where customers could purchase prescription drugs with virtually no medical oversight. The purchaser would select the drug he wanted and fill out a brief medical questionnaire. This was then submitted to a doctor who reviewed it and approved the order. The doctors were paid per questionnaire reviewed, and often reviewed more than one hundred per day. Once approved, the prescription was transmitted to an actual pharmacy that Antonio controlled and the medicine was shipped out. Typically, he would send out one thousand orders per day.

Herman’s role was more limited - he filled orders and ran the customer service call center. Eventually, he developed his own “back end” administrative website to help Antonio process payments.

An Eastern District jury convicted them both; the court sentenced Herman to eighteen months’ imprisonment and Antonio to ninety-seven.

The Appellate Court’s Decision

Money Laundering

Taking the issues in reverse order, here the court was required to sort out the confusing array of opinions relating to money laundering in United States v. Santos, 553 U.S. 507 (2008). In Santos, which involved an illegal gambling operation, a four-justice plurality applied the rule of lenity and concluded that the term “proceeds” in the money laundering statute means profits, not gross receipts. The plurality was concerned that if the definition of “proceeds” were not limited to profits, the money laundering would “merge” with the crime of running an illegal gambling business because the essence of the business itself, taking money from bettors and paying the winners, would also be money laundering transactions.

Here, Antonio argued that, under Santos, his money laundering conviction likewise could not stand because his case presented the same “merger problem.” The circuit, addressing a question of first impression, held that Santos does not apply to money laundering offenses that derive from the sale of contraband.

But getting there involved a very detailed look at Santos. The fifth vote in that case came from Justice Stevens, who held that the meaning of the term “proceeds” depended upon the nature of the underlying criminal conduct. His view of the legislative history of the money laundering statute was that Congress intended it to apply to the gross revenues, and not just the profits, of certain other activities, including “the sale of contraband.” The four justices who dissented would have held that the term “proceeds” means “gross receipts” in all circumstances. Accordingly, the circuit, in trying to identify the scope of Santos, looked to the “position taken by those Members [of the Court] who concurred in the judgment on the narrowest grounds.” Some circuits have limited Santos to its facts, while others have indicated that Santos applies more broadly, to any case that presents a “merger problem.”

Here, the court concluded that the Stevens concurrence determined the scope of Santos and thus that the statutory term “proceeds” includes “gross revenue from the sale of contraband.” It accordingly affirmed Antonio’s money laundering conviction.

Conscious Avoidance

To convict the defendants of unlawful distribution of controlled substances, the jury was required to find that they either knew or “reasonably should have known” that their doctors and pharmacists were acting in bad faith; that is, “outside the usual course of professional practice and without a legitimate medical purpose.” Their defense was good faith reliance on the determinations of the doctors and pharmacists. Here, the district court gave a conscious avoidance charge but the charge neglected to mention that the concept of conscious avoidance did not apply if the jury found that the Quinoneses actually believed that the doctors and pharmacists were acting in good faith.

A two-judge majority held that the error was harmless because defendants’ “actual but unreasonable belief in the existence of ... the doctors’ and pharmacists’ good faith” could not absolve the defendants of culpability.

The government introduced “overwhelming evidence that the defendants knew or reasonably should have known that the doctors and pharmacists on whom they relied were acting in bad faith.” The defendants knew that their internet pharmacies permitted no interaction at all between a customer and a doctor. In fact, days after Florida enacted a law prohibiting Florida doctors from writing prescriptions without physically consulting with their patients, Antonio moved his filling pharmacy to New York. Moreover, he regularly changed locations as law enforcement raided or shuttered his pharmacies. Antonio was also aware that someone else in the same business had been arrested and that federal agents had informed some of his employees that his internet pharmacies were illegal.

Accordingly, the majority affirmed on this point as well.

Judge Straub vigorously dissented. In his view, the flawed language of the instruction required a new trial. The “actual belief” language is critical to the conscious avoidance instruction. “When knowledge of the existence of a particular fact is an element of an offense, such knowledge is established if a person is aware of high probability of its existence, unless he actually believes that it does not exist.” This language “must be incorporated into every conscious avoidance charge” and is particularly important in cases like this one, where the defendant “relied on his lack of knowledge of a crucial fact as a central element of his defense.” The conscious avoidance charge here was “completely silent on the Quinones’ actual beliefs” and thus was “wholly deficient and clearly erroneous.”

Judge Straub also found the error to be prejudicial. First, he disagreed with the majority’s premise that the Quinones’ actual but unreasonable belief in the doctors’ and pharmacists’ good faith could not absolve them. In his view, if the jury found that the Quinoneses actually believed that the doctors and pharmacists were acting in good faith, it could not have convicted them on a conscious avoidance theory.

Judge Straub also found significant evidence that the Quinoneses did indeed believe that the doctors and pharmacists were acting in good faith. Antonio testified; he explained the steps he took to ensure that his business was legal, and asserted that he actually believed that the doctors and pharmacists were acting in good faith. He also consulted with an attorney, who conducted an investigation and advised him that the businesses were legal. He moved his business out of states where it was not legal, and had a “block list” to prevent drug abusing customers from repeatedly purchasing pills.

Judge Straub also disagreed with the majority that there was “overwhelming evidence” that the Quinoneses should have known that the practitioners were acting in bad faith. The record here contained “conflicting testimony as to what the Quinoneses knew and believed,” as well as “clear evidence that Antonio consulted with both the doctors [and] attorneys about whether his business was legal.” Accordingly, “a jury should determine whether the Quinoneses are guilty after hearing a proper jury charge.”

Summary Summary

Here are three more summary orders of interest.

United States v. Hernandez, No. 09-4930-cr (2d Cir. March 25, 2011), points out an interesting Guidelines question. Under § 3B1.1, the government bears the burden of proving that the defendant played an aggravating role. And one of the requirements for safety valve consideration is that the defendant not receive an aggravating role enhancement. But the circuit has held that the defendant bears the burden of proving that he qualifies for the safety valve. These conflicting principles have created "uncertainty about where the burden lies with respect to" this aspect of safety valve relief. This opinion, unfortunately, only points out the question but does not answer it.

In United States v. Nelson, No. 09-3308-cr (2d Cir. March 23, 2011), the court considered whether an appeal waiver was knowing and voluntary. The waiver precluded an appeal of any sentence of 137 months' imprisonment or less, but during the plea, at one point, the court advised Nelson that he would not be able to appeal any sentence that "exceeds 137 months' incarceration." Nevertheless, the court, "after careful review of the record," declined to invalidate the waiver. At another point in the plea the AUSA correctly explained the appeal waiver, and the court itself correctly described a parallel provision of the waiver dealing with career offender classification. Thus, there was "no meaningful risk that Nelson elected to enter into the plea agreement on the mistake understanding that it precluded his ability to appeal a sentence in excess of, but not at or below, 137 months."

In United States v. Bell, No. 09-4964-cr (2d Cir. March 23, 2011), the defendant challenged the government's rebuttal summation, which identified him with Lee Harvey Oswald and also "falsely portrayed him as a gambler and gunman waiting for a shootout with the police." The circuit found some of the comments "troubling," because they "overstated the trial evidence in a number of respects," and others "misleading" because they were "unsupported by the evidence" and an "inappropriate" characterization of it. But the court nevertheless affirmed, noting that the defendant did not object to the comments below, and that they were an "aberration in an otherwise fair proceeding."

Get the Point?

United States v. Potes-Castillo, No. 07-5518-cr (2d Cir. March 15, 2011) (Straub, Hall, CJJ, Underhill, DJ)

The defendant here received a 188-month sentence after a jury convicted him of a drug conspiracy. At sentencing, it emerged that he had but one prior conviction: a 2004 New York State conviction for driving with ability impaired by alcohol (“DWAI”) in violation of New York Vehicle and Traffic Law § 1192(1). He was sentenced to a one-year conditional discharge and a fine.

Although he argued at sentencing that the conviction should not count in his criminal history score, the district court disagreed. It assessed him one point for the conviction and two additional points for committing the instant offense while under the conditional discharge. This placed him in Category II and rendered him ineligible for safety valve treatment.

On appeal, the circuit reversed.

Guideline Section 4A1.2(c) contains two lists of misdemeanor and petty offenses that are excluded from consideration in the criminal history score. Sentences for the offenses listed in 4A1.2(c)(1) and those “similar to” them are excluded if the sentence was a term of probation of one year or less or a term of imprisonment of at less than thirty days, or the prior offense was similar to an offense for which the defendant is now being sentenced. Included in the § 4A1.2(c)(1) list is “careless or reckless driving.”

Section 4A1.2(c)(2) contains a list of offenses - and also includes those “similar to” them - for which the sentences are never counted. Included on this list are “minor traffic infractions (e.g., speeding.)”

There is an Application Note that deals with DWAI offenses. Note 5 to § 4A1.2 provides that “Convictions for driving while intoxicated or under the influence (and similar offenses by whatever name they are known) are counted. Such offenses are not minor traffic infractions within the meaning of § 4A1.2(c).”

The plain language of the Note precludes an argument that DWAI is a “minor traffic infraction” under § 4A1.2(c)(2), since both the Note and this section use the same phrase.

But, the circuit concluded, Note 5 is ambiguous as to whether it also precludes applying § 4A1.2(c)(1) to DWAI offenses. If the first sentence of the note is read to mean that such offenses are always counted, without possibility of exception, then the second sentence would be rendered “meaningless.” Another reading, however, would be that the Note simply takes such offenses out of § 4A1.2(c)(2), leaving open the possibility that they might still be covered by § 4A1.2(c)(1). This is the reading that the court selected.

The first alternative - advocated by the government - would treat DWAI offenses, in essence, as felonies, and always count them, making them the only misdemeanors or petty offenses to which § 4A1.2(c) can never apply. The court rejected this: “It would be plainly inconsistent with section 4A1.2(c) to argue that DWAI offenses, although they are misdemeanor or petty offenses, are always counted and can never fit within the exclusion explicitly provided in section 4A1.2(c)(1).”

Rather, the court concluded that the Note is meant only to take DWAI offenses out of § 4A1.2(c)(2), but that they can still be excluded from the criminal history score if they are “similar to" any offenses listed in section 4A1.2(c)(1). Under this section, “the seriousness of the conduct in each individual case will determine whether the sentence actually counts.”

Accordingly, here, the district court erred by failing to apply § 4A1.2(c)(1) to the DWAI conviction. Since the sentence imposed on the DWAI was not so severe as to take the conviction out of § 4A1.2(c)(1), and the offense was not similar to the federal offense of conviction, the circuit sent the case back to the district court with instructions to determine whether the DWAI conviction was “similar to” the § 4A1.2(c)(1) offense of “careless or reckless driving.”

Down for the Count

United States v. Desnoyers, No. 10-0447-cr (2d Cir. March 14, 2011) (Jacobs, Wesley, Chin, CJJ)

Mark Desnoyers was convicted of, inter alia, one count of conspiring to both violate the Clean Air Act (“CAA”) and to commit mail fraud, in connection with his asbestos abatement work. The district court, finding both factual and legal problems with the conviction on that count, entered a post-verdict judgment of acquittal. On the government’s appeal, the circuit reversed and reinstated the conviction.

The conviction on the conspiracy count related to asbestos abatement work in eight buildings. But, after trial, the government conceded that seven of the buildings were not subject to the CAA’s asbestos removal regulations. As for the eighth, the evidence was equivocal. The issue - whether that building contained enough asbestos to qualify - was not proven directly at trial because no witness actually took measurements there. Rather, the only evidence was a description of the abatement project that used trade jargon that was ambiguous.

The district court concluded that the guilty verdict on the conspiracy count could not stand, holding that the CAA object of the conspiracy “suffered from a factual defect,” and, alternatively, that the CAA object “suffered from a legal defect.”

The circuit disagreed on both theories, and reversed. A factual challenge to a conviction raises the standard question for sufficiency: could a reasonable jury find each element of the offense proven beyond a reasonable doubt. A legal challenge occurs when a defendant is “charged with conduct that is not legally actionable.” The difference is significant. Where a jury is considering alternative theories of guilt but renders a general verdict, a factual challenge fails as long as there was “sufficient evidence to support one of the theories presented.” But if the challenge is legal and“any of the theories was legally insufficient, then the general verdict must be reversed.

Under these standards, the conspiracy count was sound. As for factual insufficiency, Desnoyers did not challenge the mail fraud object at all. Thus, even if the CAA theory were insufficient, the conviction should still survive a factual challenge.

There is a “caveat” to this rule - the count should still be reversed when “an overwhelming amount of evidence relevant only to the unproved part of the conspiracy may have prejudiced the jury.” But the caveat did not apply here. There was not an overwhelming amount of evidence relevant only to the CAA object. Rather, most of the evidence was relevant both to the CAA object and the mail fraud object.

Desnoyer’s legal challenge to the count also failed. In fact, he did not “actually set forth a cognizable legal challenge” to the count at all. Rather, all he did was restate the factual objection - that the government could not prove that any of the eight projects was subject to CAA asbestos regulations - and cast it as a legal defect. The court rejected his claim that the jury was instructed “using an incorrect explanation of the law.”

Thus, while the circuit reversed a conviction for Hobbs Act extortion where the two of the three definitions of extortion in the jury charge did not satisfy the statutory definition of extortion, this case was different. All the jury was asked was whether his conduct violated the CAA, something that juries are “always asked” to do. There was no mistake about the law.

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.

Nothing Special

Morales v. United States, No. 04-0585-pr (2d Cir. March 11, 2011) (Pooler, Hall, Livingston, CJJ)

Although decisions in habeas cases are generally beyond the scope of this blog, this one contains an discussion of an interesting sentencing issue relating to convictions on multi-object conspiracies where there is no special verdict.

Morales was a “Director of Security” for the Latin Kings street gang. In 1995, he was convicted of multiple RICO and VICAR counts as well as two drug counts: a conspiracy to possess with intent to distribute marijuana, heroin, cocaine and cocaine base, and a substantive count of possessing with the intent to distribute 50 grams or more of crack cocaine. He received six life sentences, one of which was on the drug conspiracy count. Although it was a multiple-object conspiracy count, the jury did not return a special verdict as to which drugs Morales conspired to possess, and the life sentence on that count was premised on an assumption that he conspired to possess cocaine and/or cocaine base, since the maximum sentence would have been less than life for the other drugs that were the object of the conspiracy.

After losing his direct appeal, Morales filed a pro se 2255 motion arguing, inter alia, that his trial and appellate counsel were ineffective for not challenging the life sentence on the drug conspiracy count since, under United States v. Orosco-Prada, 752 F.2d 1076 (2d Cir. 1984), with only a general verdict on that count, the sentence should have been based on the drug carrying the lowest statutory penalty - marijuana.

The district court denied the motion, and the circuit affirmed, but not because there was no error. Rather, the court held that Morales could not establish prejudice, since he received five other life sentences.

But the court went on to discuss the legal issue itself, which is an important one. In Orozco-Prada, 732 F.2d at 1083, the jury convicted the defendant of conspiring to traffic in both marijuana and cocaine without specifying. The circuit held that it was error for the defendant to be sentenced in excess of the maximum term for a marijuana conspiracy. In “the absence of a special verdict, there was no way for” the sentencing judge “ to know whether the jury intended to convict ... for a cocaine-related conspiracy, for a marijuana related conspiracy” or both. Accordingly, the judge “should have inferred that the conviction was for the drug conspiracy with the lowest statutory maximum,” and sentenced accordingly.

Here, the district court was aware of this rule, but found it in applicable to Morales. Citing a Seventh Circuit case, Peters, the court used the verdict on the substantive drug count - which was for possessing cocaine base - to assume that the jury also convicted Morales of conspiring to traffic in cocaine base. The district court called this an “exception” to Orozco-Prada.

In this opinion, the circuit “clarif[ied]” that it has “not yet expressly adopted any exception to the rule concerning general verdicts on multiple-drug conspiracy counts set forth in Orozco-Prada.” Rather, so far, the court has expressly refrained from adopting Peters. But its finding of a lack of prejudice here, coupled with the parties' lack of briefing on whether the court should adopt Peters going forward prevented it from deciding the question. Instead, “we will wait until the issue is squarely before us.”

Meet The Press

United States v. Treacy, No. 09-3939-cr (2d Cir. March 9, 2011) (McLaughlin, Hall, CJJ, Restani, JCIT)

James J. Treacy, former COO and President of the parent company of Monster.com, was convicted of securities fraud and related offenses based on a scheme in which he backdated stock options. On appeal, the circuit held that the district court violated Treacy’s confrontation rights by restricting his cross-examination of a Wall Street Journal reporter who had written an article about the backdating of options at Monster that seemingly contained false exculpatory statements made by Treacy, but that the error was harmless. The court also found that the district court improperly calculated the forfeiture amount with respect to one of the options grants.

The Confrontation Issue

At trial, the government introduced into evidence a WSJ article that opined that the odds were one in nine million that a pattern of options grants as favorable or more favorable than those Treacy received would have occurred if dates were selected randomly. The article also contained extensive quotes from Treacy himself, in which he denied any wrongdoing, and the government called the reporter to the stand to verify the accuracy of the statements he attributed to Treacy.

The reporter tried to quash the subpoena, citing the journalist’s privilege. The district would not quash, but tightly limited both the direct and the cross-examination. As for the direct, the questioning was to be limited only to the reporter’s work on the particular article; he would only be asked to verify that Treacy made statements to him that he subsequently reported, and to identify the specific things that they said to each other in the interview. As for the cross, since Treacy argued only that the statements were taken out of context, and not that he did not make them or that they were otherwise misreported, his questioning of the reporter was limited to going over the questions that the reporter asked of him “immediately before those that elicited the responses quoted in the story.”

In the event, when the reporter testified, the court sustained the reporter’s attorneys objections to questions asked by Treacy that went beyond the court’s ruling - such as why he interviewed Treacy, and questions about a post-interview that the reporter sent to Monster’s public relations consultant - holding that Treacy could not make an “open ended attack” on the reporter’s credibility. The court, however, did allow Treacy to introduce the email itself.

The circuit began its discussion with the journalist’s privilege, noting that “at least in the civil context” a “journalist possesses a qualified privilege protecting him or her from the compelled disclosure of even nonconfidential materials.” Here, there was no claim that the reporter was trying to protect a source or other confidential materials. To the contrary, he was trying to protect materials that the source wanted disclosed. In this situation, the nature of the press interest protected by the privilege is narrower, and the privilege is more easily overcome. In civil cases where this is the issue, the privilege yields if a litigant can establish that the materials are of likely relevance to a significant issue in the case and are not “reasonably obtainable from other sources.”

The court rejected the argument - made by Dow Jones, as an amicus - that there should be a higher standard for overcoming the journalist’s privilege in criminal cases. Without delving into the competing constitutional concerns, the court simply noted that Dow Jones had not provided “any convincing reason why” the test should be different in criminal cases where only nonconfidential materials are sought. Thus, “in instances where a reporter is not protecting a confidential source or confidential materials, the showing required to overcome the journalist’s privilege is the same in a criminal case as it is in a civil case.” This is true “whether the party seeking to overcome the privilege is the prosecution or the defense.”

The district court correctly applied these principles in limiting the direct examination of the reporter. Treacy’s statements to the reporter appeared to be false exculpatories, and were thus “likely relevant.” And, since Treacy could not be compelled to testify, the reporter was the only source of the information. The district court’s limitations protected the journalist’s privilege by tailoring the questions to the showing of relevance and necessity.

But the limitations on the cross-examination, by contrast, went too far. Even taking into account the district court’s broad discretion in setting the parameters of cross-examination, curtailing cross-examination that “keeps from the jury relevant and important facts bearing on the trustworthiness of crucial testimony” is an abuse of discretion. Accordingly, here, it was an abuse of discretion to forbid cross-examination of the reporter beyond the ways that the ordinary rules regarding scope of direct and relevancy would restrict the examination of any other witness. Since the privilege issue was the same on cross as it was on direct, the district court should not have treated the reporter’s “interest as a competing interest to be balanced against Treacy’s Confrontation Clause rights.”

Thus, Treacy should have been permitted to “challenge [the] reporter’s credibility about the specific content of his direct testimony.” In addition, while the district court had the discretion to prevent a “general attack on credibility,” in application the restriction here went too far. The purpose of the reporter’s direct testimony was to confirm the accuracy of the statements attributed to Treacy in the article. Thus, Treacy should have been able to test the reporter’s memory with respect to the writing of the article. If the district court truly believed that “Treacy could not fully exercise his Confrontation Clause rights” due to the reporter’s “assertion of the privilege, it ought to have” either quashed the subpoena or stricken the reporter’s direct testimony.

A confrontation error does not require reversal if the government establishes that the error was “harmless beyond a reasonable doubt,” after assuming that the “damaging potential of the cross-examination were fully realized.” That standard was met here, even though the government in summation repeatedly emphasize Treacy’s statements to the reporter as evidence of his mendacity. Here, “the other evidence in the prosecution’s case was vastly more significant to demonstrating Treacy’s actual actions.” The court noted that Treacy was able to introduce the reporter’s post-interview email and that this allowed him to argue, even if with less force, that the statements attributed to him in the article were taken out of context. Second, in this circuit, false exculpatory statements are considered to be weak circumstantial evidence of guilt. Finally, other evidence in the case convincingly established Treacy’s guilt, and the court was “confident that the jury would not have been persuaded otherwise by an ambiguous newspaper article.”

The Forfeiture Issue

The circuit did agree, however, that the district court erred in for calculating the forfeiture amount as to one of the options grants because the court used an incorrect measurement date. According to Treacy, if a different date were used it would result in a smaller forfeiture. The court thus vacated this portion of the forfeiture and remanded for recalculation.

A Good-Faith-Based Decision

United States v. Clark, No. 09-3462-cr (2d Cir. March 8, 2011) (Sack, Raggi, Lynch, CJJ)

In the district court, defendant Clark moved to suppress physical evidence and statements obtained after execution of a search warrant, and the district court granted the motion. On this, the government’s appeal, the circuit agreed that the warrant was defective - it did not establish probable cause - but that, contrary to the district court’s conclusion, the good faith exception applied. The court accordingly reversed and remanded.

Background

Local police officers in Niagara Falls, New York, obtained a warrant from a city court judge to search Clark and "1015 Fairfield Ave, being a multi family dwelling” for drugs and drug dealing paraphernalia. The supporting affidavit disclosed that an informant of “unknown reliability” told them that Clark was selling cocaine there, and that Clark had “full control” over the location. The affidavit also described two controlled purchases of cocaine that took place in “the area of 1015 Fairfield Ave.”

When the officers executed the warrant, Clark was in a downstairs apartment, and the officers found cocaine base, money, and other evidence. They arrested and Mirandized Clark who asked, “What am I looking at? 25 or what?”

On Clark’s suppression motion, the district court held that the warrant was not supported by probable cause to search the entire multi-family dwelling, and that the search tainted Clark’s statement. It also held that the good faith exception did not apply because the issuing judge “failed to act as a neutral and detached magistrate,” the warrant was “facially defective,” and the lack of probable cause was “so apparent that the police could not reasonably rely on the validity of the warrant.”

The Appeal

The circuit, like the district court, could not identify a “substantial basis” for the local judge to authorize a search of the entire multi-family dwelling. Included in the Fourth Amendment is a particularity requirement. Concerns as to this requirement most often arise when the warrant does not concretely or accurately describe the place to be searched. But particularity is also an issue when the warrant describes a multi-family dwelling, because it is possible that the “breadth of that description outruns the probable cause supporting the warrant.”

The government tried to argue that the warrant application asserted that Clark exercised “control over the entire premises,” and thus that there was no particularity problem. The circuit was not convinced. Control over a multiple-occupancy building can support a warrant to search the whole premises, but only where the warrant is supported by probable cause to believe that “evidence of criminality will be found throughout the building.” The mere allegation of “control,” without more, is not enough. Here, the allegations of “control” were not enough to establish probable cause to support a search of all residences in the building. The allegation came from an untried informant, and the assertion was entirely conclusory. There was thus no basis for the issuing judge to find probable cause. The judge was not told the size of the building or the number of units, and the affidavit did not explain what the informant meant by “full control,” or include any descriptive facts on the issue. Moreover, the affidavit’s description of the controlled purchases only established that Clark was in the “area” of 1015 Fairfield Avenue. It did not establish where within the building he conducted his drug business and certainly did not establish that he had control over all parts of the building.

Thus, even though there was probable cause that Clark was dealing drugs from “somewhere within 1015 Fairfield Avenue,” the totality of the circumstances did not provide a “substantial basis to conclude that Clark so controlled the various residential units in that multi-family dwelling that there was probable cause to think evidence of his criminal conduct could be found throughout the building.”

But, nevertheless, the court held that the district court erred in its application of the good faith exception. First, the issuing judge did not abandon his judicial role. While he made a legal error in identifying probable cause, this does not indicate the “sort of wholesale abandonment” necessary to overcome the good faith exception. Nor was the warrant facially deficient. That occurs only when “it omits or misstates information specifically required to be contained therein,” that is, “the place to be searched, and the persons or things to be seized.” The warrant here had no such defect. While the warrant was not, in fact, based on probable cause, the probable cause need not be “stated in the warrant itself.” Rather, a lack of probable cause is a defect in the supporting affidavit, not the warrant. Finally, the warrant was not so lacking in probable cause as to preclude reasonable reliance. The affidavit here was not “bare bones” - it was not “totally devoid of factual circumstances to support conclusory allegations,” even though it did not provide “detailed factual allegations” to support probable cause to search the entire building. It still had enough detail to render reliance on it reasonable, since it clearly established probable cause to believe that Clark was dealing drugs form somewhere within the building. And, while the affidavit’s allegation of “control” was “entirely conclusory,” the officers’ reliance on the warrant was not so “flagrant or culpable” as to warrant suppression. When the warrant was issued it was not yet settled that “control” had to be alleged with “some factual specificity.” Thus, a well-trained officer could not be faulted for relying on a warrant that lacked such specificity.

Dead Again

United States v. Qurashi, No. 10-348-cr (2d Cir. March 8, 2011) (Newman, Walker, Pooler, CJJ)

Imran Quarashi and his brother, Adnan, purchased $3 million insurance policies on Adnan’s life from two different insurance companies. They then faked Adnan’s death, falsely asserting that he had died in a car accident in Pakistan, and the insurers paid Quarashi on the policies. A few years later, Adnan returned to the United States and assumed a new identity, Hassan Khan, and Quarashi purchased eight $10 million insurance policies on Khan’s life. When he claimed that Khan had been killed in a traffic accident in Pakistan, the insurance companies balked, opened an investigation, and Quarashi was ultimately charged with fraud.

Quarashi pled guilty - Adnan is still a fugitive - and was sentenced to 108 months’ imprisonment. On appeal he challenged the district court’s inclusion of prejudgment interest on the restitution order. Noting that this was an issue of first impression here, the circuit affirmed.

The restitution statute, 18 U.S.C. § 3663A, provides that restitution shall be based on the property’s value “on the date of sentencing” if that is greater than the value on the date of loss. Since the purpose of restitution is to make the victims whole,“value” is a “flexible concept to be calculated by a district court by the measure that best serves” the statutory purpose. And, indeed, accounting for the “time-value of money” requires flexibility. Since the statute requires restitution in the “full amount of” the victim’s losses, there is “no reason to exclude losses that result from the deprivation of the victim’s ability to put its money to productive use.” Prejudgment interest “stands in to provide a rough but fair approximation” of this loss.

The court also indicated - but stopped short of holding - that in a case where there is evidence that the victim “would not have put the funds to productive use,” prejudgment interest might not be appropriate. Here, while the insurance companies’ restitution request, which included a request for prejudgment interest, did not specify how the money would have been used if it had not been paid out to Quarashi, there was no evidence that they would not have used it productively.

Summary Summary

It's been a while since the court issued an interesting summary order. But here are three that caught my eye.

In United States v. Gjuraj, No. 09-1736-cr (2d Cir. March 11, 2011), the court remanded for clarification where it was not clear that the district court understood its authority to impose the federal sentence concurrently to an undischarged term of imprisonment, where the undischarged state sentence had yet to begin.

In United States v. Alkhabbaz, No. 09-5271-cr (2d Cir. March 10, 2011), the defendant's original sentence included a reduction for acceptance of responsibility, and the government did not appeal. The defendant was resentenced after a remand, and this time the court denied him the adjustment because, in the interim, he had jumped bail. On appeal, the court held that under the cross-appeal rule - under which "an appellate court may not alter a judgment to benefit a nonappealing party," and thus, in a criminal case, absent a government appeal, the circuit cannot increase a defendant's sentence on its own initiative - the government's failure to appeal the original sentence was not a waiver of the argument that, on remand, he was ineligible for acceptance of responsibility. The cross-appeal rule does not confine the trial court, the doctrines of "default and forfeiture" do. But here the government did not forfeit the issue by agreeing to acceptance of responsibility at the original sentencing, since Alkhabbaz did not skip out until later.

In United States v. Mends, No. 09-5361-cr (2d Cir. March 4, 2011), the court agreed that a sentence to "time served," when the defendant had spent twenty-two months' in prison but the Guideline range was eight to fourteen months', was error. The sentence was, in effect, a "substantial upward departure or variance" that the court did not explain. Notably, the court also found that the issue was not moot, even though Mends had completed both the term of imprisonment and his supervised release, because the length of the sentence "could materially affect his prospects of obtaining a discretionary waiver of inadmissibility" from an immigration judge. This "potentiality" gave Mends a "personal stake" in the outcome of the litigation sufficient to create a "case or controversy" under Article III of the Constitution.

Peter Paul and Money

United States v. Paul, No. 09-3191-cr (2d Cir. March 7, 2011) (Cabranes, Chin, CJJ, Crotty, DJ)

Defendant Peter Paul pled guilty to securities fraud, in connection with a stock manipulation scheme that permitted him to fraudulently obtain multi-million dollar margin loans, which he never repaid, from two brokerage houses. The district court sentenced Paul principally to 120 months’ imprisonment and more than $11.4 in restitution.

He raised three main claims on appeal, all without success.

At a pretrial conference, the district judge remarked that he had a reputation for giving a Guideline sentence after trial but for being lenient with defendants who pled guilty. The judge also remarked that the twenty-five months Paul spent fighting extradition in Brazil - he apparently fled there as his scheme was unraveling - would not be credited if he did not plead guilty. On appeal, Paul claimed that these remarks violated Fed.R.Cr.P. 11(c)(1), which forbids the district court from participating in plea discussions. The court rejected a “bright-line” rule in assessing Rule 11(c)(1) claims, noting that such issues are “highly fact-specific.” The the judge made the first remark in the context of setting a trial date - not about Paul specifically. The second remark, in context, was of even less concern to the court; it was clearly related to the court’s effort to find a way to release Paul on bail and not to coerce a plea. Moreover, any Rule 11(c)(1) violation here was harmless; Paul was not present when the remarks were made, pled guilty several months later, affirmed in the plea that he was doing so voluntarily, and neither he nor his attorney ever objected to the statements.

Paul also claimed, again for the first time on appeal, that the nearly four-year delay in his sentencing violated his right to a speedy sentencing. But the court found no plain error. Most of the delay was due to prosecutorial negligence, which “does not weigh as heavily as would an intentional delay,” and one year of the delay was attributable “solely to Paul’s request for adjournments.” In addition, Paul could identify no actual prejudice resulting from the delay other than his anxiety over the uncertainty of what would happen to him.

Finally, Paul challenged the restitution order, which required him to repay the losses to the brokerage houses that extended the margin loans. He argued that those losses were caused by the declining stock price, which left the institutions without the collateral necessary to recover the money they lent. The circuit disagreed because the losses were not caused by a decline in stock value, they were caused by “the making of the loans in the first instance,” and Paul clearly obtained the loans fraudulently.

Racket Club

United States v. Applins, No. 07-2193-cr (2d Cir. March 1, 2011) (Miner, Sack, Hall, CJJ)

This decision closes a hole in the Second Circuit’s RICO jurisprudence. The appellants, drug dealers who were members of something called the Elk Block gang, were convicted of RICO conspiracy under 18 U.S.C. § 1962(d) in the Northern District of New York. The trial judge gave confusing jury instructions as to whether, for RICO conspiracy, the existence of an enterprise was an element of the offense.

The defendants pursued this issue on appeal, and the circuit affirmed, holding that “the establishment of an enterprise is not an element of the RICO conspiracy offense.” In a footnote, the court brushed aside its past decisions that seemed to suggest otherwise, deeming the relevant language “dicta.”

Information Failure

United States v. Espinal, No. 09-4344-cr (2d Cir. March 7, 2011) (Walker, Straub, Lynch, CJJ)

Here, the district court did not properly follow 21 U.S.C. § 851(b), which sets out the procedures for using a prior felony information to increase the mandatory minimum sentence in a drug case. Because both the defendant and the government were prejudiced, the circuit remanded the case for resentencing.

Background

The government had offered to permit defendant Santo Laiz to plead guilty to a drug offense with a ten-year mandatory minimum and agreed to refrain from filing a prior felony information. But Laiz pled guilty after the deadline, by which time the government had filed the information, which alleged that Laiz had been convicted of a felony drug offense in Massachusetts under the name “Jose Luis Lai.” During Laiz’ guilty plea, the court did not ask him whether he admitted to the conviction.

In his sentencing submissions, Laiz raised various legal challenges to the information, but did not clearly deny the allegation that he had in fact been convicted of the offense it specified. Thus, at the sentencing itself, the prosecutor sought clarification of the defendant’s position. Laiz’ attorney replied that he had “no grounds to believe that Mr. Laiz was not convicted,” but, since had not verified the conviction himself, he was “taking the word of the government.”

The district court still did not ask Laiz himself to affirm or deny the conviction. Instead, it asked the prosecutor for verification, and the AUSA responded by handing up a rap sheet that warned that it was “not supported by fingerprints.” The rap sheet had a variety of names, including “Santo Ramon Laiz” and “Jose Luis Lai,” and a birthdate of December 3, 1964. An associated docket sheet reflected a similar conviction with some different names and the same date of birth. The identifying information on these documents was not entirely consistent with those in Laiz’ PSR - the date of birth was different and some of the aliases differed, as well.

When the judge finally asked Laiz whether he affirmed or denied the conviction, on advice of counsel, Laiz remained silent. The judge, concluding that Laiz did not have a right to refuse to affirm or deny, imposed the enhanced, twenty-year minimum sentence with no further findings or warnings to Laiz.

The Appellate Court’s Decision

Laiz’ main argument on appeal was that the proof was insufficient to establish that he was the person named in the Massachusetts records. But the circuit, finding that the government had not had a “full and fair opportunity to present its best evidence” on the issue, did not rule on the sufficiency of the evidence. Instead, finding numerous procedural defects, the court sent the case back for a do-over.

Under Section 851(b), once the prosecutor has filed a prior felony information, if the defendant is convicted of the underlying offense, the district court must ask the defendant whether he affirms or denies that “he has been previously convicted as alleged in the information,” and must also inform the defendant that he waives that any collateral challenge to the prior conviction that is not made before sentence is imposed. If the defendant denies the allegation, or claims that the conviction is invalid, he must be given an opportunity file a written response to the information. This triggers a hearing, at which the government must prove any issue of fact beyond a reasonable doubt.

The district court did not follow these procedures “meticulously.” First, it did not ask Laiz to affirm or deny the prior conviction at his plea, although it did not have to then. Moreover, while Laiz did not expressly deny the conviction in his sentencing submission, the failure to do so then did not waive the objection. Accordingly, by the time of sentencing there was still “some ambiguity” as to the extent of Laiz’ objection to the enhancement.

Moreover, at sentencing, the district court did not undertake the required “affirm or deny” inquiry until after “considerable confusion about Laiz’ position had already been generated,” and never warned him that he had a right to put his objections in writing and that a failure to object would constitute a waiver. The “hearing” required by the statute was more like an “impromptu inquiry,” in which the district court examined documents handed up by the prosecutor without addressing their “obvious discrepancies” or “giving the defendant an opportunity to review and comment on them.”

Of course, Laiz did not help matters. Neither he nor his counsel made clear before sentencing whether they planned challenge the conviction, and Laiz’ refusal to affirm or deny is not covered by the statute at all. But, at least on these facts, the court refused to conclude that the refusal should be treated either as a denial - triggering the government’s beyond-a-reasonable-doubt burden - or an affirmation, which would have served as a waiver of the right to challenge the prior felony, since the district court did not follow the “affirm or deny” inquiry with the other statutory requirements: an opportunity to respond in writing and a warning of the consequences of a failure to act.

The failure to comply with § 851 does not automatically invalidate the enhanced sentence, since harmless error analysis applies. But here, Laiz was prejudiced in two distinct ways, apart from the extra ten years of prison time he received. First, the court’s failure to warn him of the effect of failing to object “may well have influenced Laiz’ unusual choice not to affirm or deny the allegations in the information,” which in turn affected the government’s burden of proof. In addition, the district court’s failure to follow the statutory procedure “compromised the reliability and thoroughness of the ‘hearing’” that it conducted.”

In the end, given the many uncertainties, the court neither affirmed the enhanced penalty nor struck it. Instead, it vacated the sentence and remanded the case for resentencing so that “proper procedures” could be followed.

Face Time

United States v. Hotaling, No. 09-3935-cr (2d Cir. February 28, 2011) (Newman, Hall, CJJ, Restani, JCIT)

John Hotaling cropped the faces from non-pornographic pictures of minor females and morphed them onto the heads of nude adult women engaged in sexually explicit conduct, including one in which the woman was handcuffed, shackled and tied to a dresser. He pled guilty to violating 18 U.S.C. §§ 2252A and 2256(8)(A), which together make it a crime to possess images containing child pornography where the image “has been created, adapted or modified to appear that an identifiable minor is engaged in sexually explicit conduct.” The district court sentenced him to 78 months in prison, having included in the Guidelines calculation the enhancement for possessing an image that portrayed sadistic or masochistic conduct. On appeal, the circuit rejected Hotaling’s “as applied” challenge to the statute as well as his challenge to the sentencing enhancement.

The government has a compelling interested in protecting minors from becoming victims of child pornography, and child pornography is not protected speech under the First Amendment when using the child’s image “implicates the interests of an actual minor.” Hotaling’s argument was that the interests of these actual children were not implicated because the children were not engaged in sexual activity during the creation of the photographs.

But the circuit concluded that the “interests of actual minors” are still implicated when their faces are used to create morphed images “that make it appear that they are performing sexually explicit acts.” Here, the only recognizable persons in the pictures were the minors, and Hotaling had added their actual names to the image files - while he did not distribute the images, they were digitally coded in a way that appeared that he planned to. Accordingly, the images were not “protected expressive speech under the First Amendment.”

The circuit also agreed that the sadism/masochism enhancement applied, even though the image did not actually depict a minor engaged in sexual activity that would cause her pain. A district court should apply the enhancement in cases where, using an “objective standard,” it finds that the morphed image portrays both sexual activity involving a minor and sadistic conduct that includes the likely infliction of pain, physical, mental or other excessive cruelty, or other depictions of violence. The image here clearly met that test, since it appeared to depict a minor engaged in sadistic conduct that would have caused at least some level of pain, and also involved cruelty in the form of forcible restraint.

PC World

As usual, sentencing issues occupy the court in its most recent pair of per curiam opinions.

In Brown v. United States, No. 09-3495-pr (2d Cir. March 1, 2011) (Winter, Livingson, Lynch, CJJ) (per curiam), an appeal of the denial of a § 2255 motion, the court rejected an argument that the Sentencing Guidelines’ treatment of prior convictions affected the application of the Armed Career Criminal Act (“ACCA”). ACCA counts predicate convictions for crimes “committed on occasions different from one another” separately, even if the offenses happened on the same day, were not separated by an intervening arrest and concurrent sentences were imposed on the convictions in a single proceeding. For ACCA, the relevant considerations are only whether the victims and locations were different, and the degree to which the offenses were separated by the passage of time.

Brown had two prior robbery convictions that, under Guidelines section 4A1.2 - which is part of the basic criminal history rules - would be treated as a single conviction because he was sentenced on them simultaneously and the offenses were not separated by an intervening arrest. Nevertheless, the two convictions were properly considered as separate ACCA predicates. “Section 4A1.2 speaks only to the calculation of criminal history points and does not bear on the calculation of Brown’s ACCA sentence.”

United States v. Akinrosotu, No. 09-2333-cr (2d Cir. February 28, 2011) (Cabranes, Chin, CJJ, Crotty, DJ) (per curiam) considers the district court’s ability to modify a fine, but does not reach a firm conclusion. At sentencing, the court had imposed a $50,00 fine - due immediately - and imposed a condition of supervised release requiring the payment of any balance that remained unpaid as of the defendant’s release from prison. Years later, the defendant, still serving his thirty-year sentence, unsuccessfully petitioned the district court for remission of the fine. Addressing a question of first impression, the court of appeals concluded that, if § 3583(e)(2), which permits the district court to modify a condition of supervised release, confers any authority to modify a fine at all, that authority is limited to the amount that remains unpaid at the commencement of the term of supervised release. Here, the prison sentence is likely to outlive the fine, since under the law applicable to Akinrosotu - since amended - the fine will expire twenty years after its imposition, but Akinrosotu will not yet be on supervised release. Thus, concluding that there will be no unpaid balance when Akinrosotu starts his term of supervised release, the court dismissed the appeal.