Friday, June 30, 2006

No Need to Interrupt Your Barbecue

United States v. Jones, Docket No. 03-1626 (2d Cir. June 30, 2006) (Kearse, Miner, Hall): This fact-intensive opinion upholds Jones's convictions (for RICO, RICO conspiracy, VICAR conspiracy, and drug conspiracy) against his sufficiency, multiplicity, retroactive misjoinder, and IAC challenges. No new law is made, and even a quick reading of this sad saga is enough to dampen one's weekend. The opinion is recommended only for those with a particular interest in the inner workings of drug trafficking networks formerly operating inside Bridgeport's P.T. Barnum Projects. A rare species, we suspect, but maybe there's one of those born every minute, too.

Friday, June 23, 2006

When Police Stop Vehicle Based on Reasonable Mistake of Fact, They May Briefly Approach Driver to Explain the Error Before Allowing Vehicle to Depart

United States v. Jenkins, Docket No. 05-2679-cr (L) (2d Cir. June 23, 2006) (Meskill, Cabranes, Wesley): This case was litigated by attorneys from this Office, so this Blog will stick mostly to description.

The Court holds that when police stop a vehicle based on a reasonable but mistaken belief that a law has been violated, they may "briefly" approach the driver to explain their error and are not required by the Fourth Amendment to allow the vehicle to depart immediately upon realizing their error. Here, the police stopped the SUV in which the defendants were traveling based on a reasonable belief that the vehicle did not have a license plate, in violation of state law. However, when the officers got out of their car and approached the SUV, they realized that the car did in fact have a temporary license on the back, which was "hard to see and poorly illuminated." Op. 6. The district court credited the officers' claim that they did not see this license before stopping the SUV. Therefore, "an objective police officer would have had a reasonable basis to believe there was a traffic violation and to stop the SUV." Op. 6.

Instead of immediately letting the SUV go after recognizing their error, however, the officers proceeded toward the passenger area of the SUV. Whereupon, unfortunately, they immediately (allegedly) detected the sweet smell of burning marijuana. One thing led to another, and two guns were found in car. Jenkins and Luther were each charged with being a felon in possession of a firearm.

The Circuit upheld the stop (and subsequent search) that led to the discovery of the guns. First, relying on the well established rule that "the validity of a stop is not undermined simply because the officers who made the stop were mistaken about relevant facts," the Court found that the initial stop of the SUV was justified under Terry in light of the district court's finding that the officers' mistake was a reasonable one. Op. 8-9. Second, the Court rejected the defendants' claim that once the officers realized their mistake, they should have "waved the SUV on and gotten back in their car." Op. 9 (quoting Jenkins's brief). The Court held that "when police officers stop a vehicle on a reasonable, albeit erroneous, basis and then realize their mistake, they do not violate the Fourth Amendment merely by approaching the vehicle and apprising the vehicle's occupants of the situation." Op. 9-10.

This is so, Judge Cabranes explains, because reasonableness is the "touchstone" of the Fourth Amendment, and because "it is reasonable for officers who have stopped a vehicle on the basis of a reasonable factual mistake to approach the vehicle and apprise the vehicle's occupants of the situation." Op. 10. And because the officers here "immediately detected an independent basis for continuing to detain the SUV and its occupants" as they approached the SUV, their subsequent actions were justified by this basis and not by the original, erroneous belief that the SUV did not have a license (which dissipated once the officers realized their error).

Finally, in a footnote, the Court addresses Jenkins's concern that its holding will lead to abuse by the police and easy circumvention of the Fourth Amendment. Judge Cabranes claims that this will not be so, importantly pointing out that this case "is limited by two factors." Op. 11 fn.10. First, the district court here credited the officers' testimony that they mistakenly believed that the SUV did not have a license when they stopped it, and found that their mistake was reasonable. Where the officers' mistake is unreasonable, this case is not implicated.

Second, the officers here gained an independent basis to detain the SUV "immediately" upon approaching it (i.e., they smelled pot), and thus did "not detain the SUV for longer than necessary to briefly explain to the occupants the reason for the stop." Id.

This is an important limitation from the defense perspective: Police may not detain a vehicle any "longer than necessary to briefly explain" their error. This is in fact two limitations, a temporal one and a content-based one. Police may only "briefly" detain the vehicle, and when they approach, they may only "explain" their error (and not, e.g., question the occupants). Therefore, when police detain a vehicle for even a second longer than needed solely to explain their mistake in stopping it (and perhaps to apologize), the stop is unjustified and police may not rely on the holding here to justify their subsequent actions.

This case estabishes a narrow rule. Similar circumstances are unlikely to recur.

Prior Convictions Triggering Career Offender Treatment Need Not Be Charged in Indictment, So Long as Sentence Does Not Exceed Legislative Maximum

United States v. Ramirez, Docket No. 05-4575-cr (2d Cir. June 23, 2006) (Meskill, Cabranes, Wesley) (per curiam): The title basically says it all. In this very short opinion, the Circuit confirms that Booker does not alter the long-standing rule that "the filing of a prior felony information under [21 U.S.C.] § 851(a)(1) 'is required only where the statutory maximum or maximum penalty under Part D of Title 21 is sought to be enhanced, not where a defendant, by virtue of his criminal history, receives an increased sentence under the Sentencing Guidelines within the statutory range.'" Op. 3 (quoting United States v. Whitaker, 938 F.2d 1551, 1552 (2d Cir. 1991) (emphases in original)). Here, Ramirez faced a Guidelines range of 151 to 188 months because he qualified as a Career Offender under U.S.S.G. § 4B1.1, based on prior convictions not alleged in the indictment (charging him with distributing an unspecified quantity of heroin in violation of 21 U.S.C. § 841(b)(1)(C)). The prior-felony information requirement of § 851(a) was not triggered because his 151-month sentence did not exceed the 20-year maximum allowable under § 841(b)(1)(C).

Thursday, June 22, 2006

Questions Concerning State of the Law in 2001 on Depraved Indifference Murder Certified to N.Y. Court of Appeals

Policano v. Herbert, Docket No. 04-5518-pr (2d Cir. June 21, 2006) (Pooler, Sack, Garaufis (by desig'n) (per curiam)): In the original panel opinion (issued November 2005), Policano v. Herbert, 430 F.3d 82 (2d Cir. 2005) (click here for our discussion), Judge Sack granted the habeas writ to Policano after concluding that the evidence at trial was insufficient to sustain his conviction for depraved-indifference murder under N.Y. Penal Law § 125.25(2), since the evidence showed that if Policano was the shooter, he intentionally murdered the victim but did not "recklessly create[] a risk of [his] death," as required by current New York law on depraved-indifference murder. See People v. Payne, 3 N.Y.3d 266 (2004); People v. Gonzalez, 1 N.Y.3d 464 (2004). Neither party petitioned for rehearing or rehearing en banc of the panel's decision.

Nonetheless, the panel has withheld the mandate in the case because (as we now learn) several active members of the Circuit sua sponte sought en banc rehearing of the panel's decision. To resolve this disagreement, a majority of the active judges has voted to deny rehearing en banc (over a vigorous dissent by Judge Raggi (click here), joined by Judges Walker, Jacobs, Cabranes, and Wesley (who also dissents separately, and more gently)) and the original panel (via per curiam) has agreed to certify several questions to the New York Court of Appeals seeking guidance as to the state of New York law on depraved-indifference murder in March 2001, when Policano's conviction became final on direct appeal. Certification is appropriate because Policano can prevail on his habeas petition only if the evidence was insufficient to sustain his depraved-indifference conviction in March 2001, and because it is unclear whether Payne and Gonzalez create new law or simply apply long-settled New York law to new facts.

Regardless of the ultimate outcome, the opinions issued yesterday are interesting for revealing a serious rift in the Circuit. Judge Raggi and the dissenters, on the one hand, use strong language criticizing Judge Sack's original panel opinion and believe that certification is unnecessary because, in their view, Payne and Gonzalez clearly create new law and because the New York courts did not act unreasonably in affirming Policano's conviction on direct appeal in 2001. The panel's per curiam response (in the course of certifying the questions) similarly reveals irritation with the dissenters, emphasizing for instance that because neither party has sought rehearing, "this case is, and has been since it was first assigned to this three-judge panel, before this panel alone." Op. 4.

The panel also takes the dissent to task for its "The sky is falling!" claim that the Judge Sack's original opinion "may well unleash a rash of habeas challenges by other convicted New York State murderers." Op. 7. This Blog shares the panel's skepticism: "More than a year and a half after the district court's opinion and judgment in this case, and more than six months after this panel's opinion was published, the dissent cites no authority for that proposition beyond five petitions for habeas corpus, not one of which was granted. [And] [a]s the time period before Payne and Gonzalez fast recedes, the asserted flood of cases is, judging by what we and the dissenters have been able to discover, scarcely a drop in the bucket." Op. 7.

Is this all much ado about nothing? Only time will tell for certain, but this Blog suspects that it is, since cases like Policano's are likely rare and AEDPA's one-year statute of limitations (along with other procedural hurdles) will further close the courthouse door to most of that already small pool.

An Expansive Reading of the Obstruction Enhancement

United States v. Riley, Docket No. 0-1585-cr (2d Cir. June 21, 2006) (Kearse, Miner, Cabranes): This decision upholds the imposition of a 2-level obstruction enhancement under U.S.S.G. § 3C1.1, even though the defendant's obstructive conduct appeared to have occurred before the Government began its investigation (and a fortiori its prosecution) of the defendant for the "instant offense of conviction," i.e., being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1). Section 3C1.1 requires, among other things, that the defendant's obstructive conduct occur "during the course of the investigation, prosecution, or sentencing of the instant offense of conviction." Here, the evidence (as recounted in the opinion) showed that while Riley clearly engaged in conduct that qualifies as obstructive (i.e., telling his girlfriend to hide and/or dispose of his guns), this occurred when no charge concerning his possession of firearms was pending or even being investigated.

The obstructive act occurred while Riley was in jail for making false statements to Government officials, and during an investigation into his drug trafficking and retaliating against witnesses. These charges were later dropped, however, and Riley pleaded guilty only to a § 922(g) count. No evidence showed that there was an on-going investigation or prosecution of this crime when Riley told his girlfriend to conceal / dispose of his guns.

The opinion tries to bridge this evidentiary gap in three ways, none of which is convincing. First, the Court points out the obstructive conduct occurred while an investigation into Riley's possible drug trafficking was in progress. The Court then states that "[i]t required no leap for the [district] court to infer that that investigation encompassed possible weapons possession, for we have taken judicial notice that, to substantial narcotics dealers, guns are 'tools of the trade.'" Op. 15.

This is a very slim reed on which to hang the enhancement. The Government introduced no evidence whatsoever that it was investigating Riley for "the instant offense of conviction" -- i.e., being a felon in possession of a gun -- when he asked his girlfriend to conceal the guns. To simply "infer" that the Government was in fact doing so, simply because guns often go with drugs, is nothing more than speculation.

Second, the Court points out that when Riley told his girlfriend to hide / dispose of his guns, he had been charged in an information with retaliating against a witness, and that this retaliation involved the use of a gun. Op. 16. The problem with this theory, though, is that the "instant offense of conviction" is being a felon in possession of a gun, not retaliating against a witness.

Finally, the Court seems to agree with the district court's reasoning that the obstruction enhancement was appropriate because Riley himself was aware of his prior felony convictions, and thus of the illegality of his possession of firearms, at the time he instructed his girlfriend to hide or destroy the guns. Op. 12-13. But this is a red herring. What Riley may have believed is irrelevant to the question of whether his misconduct occurred during the Government's investigation of the § 922(g) offense.

Surely the district court could have upwardly departed, or imposed an above-the-range non-Guidelines sentence, based on Riley's misdeeds. But in the absence of any evidence showing that the Government was investigating Riley for the felon-in-possession offense (evidence easily procured, if existent) when he engaged in the obstructive conduct, the court should not have imposed the § 3C1.1 enhancement.

Little New in the Amended Rattoballi Opinion

United States v. Rattoballi, Docket No. 05-1562-cr (amended opinion June 21, 2006) (Walker, Winter, Jacobs): Yesterday, the panel in Rattoballi (click here for our critique of the original opinion) sua sponte issued an amended opinion. However, because the Circuit (1) never informs its readers what portion(s) of the original opinion has been altered in an amended opinion; (2) the original opinion has been replaced on the Circuit's website with the amended one; and (3) this Blog already consigned its paper copy of the original opinion to the recycling bin of bad decisions, a concern arose that only memory itself could tease out what is new in the amended opinion. Fortunately, Westlaw has yet to replace the original opinion with its amendment, so those with the time and patience can compare and contrast the two.

This Blog's morning perusal reveals little new in the amended opinion; most of the errors in the original remain in the update. We spot only two alterations. Readers are encouraged to comment on additional changes this Blog failed to notice.

The first is found in the very problematic footnote 4. The original opinion pointed out that the district court may have relied upon factors (such as the defendant's age, employment record, and vocational skills) that the Sentencing Commission has deemed "'not ordinarily relevant' in imposing sentences," and that if it had done so, this was improper because "it did not point to any extraordinary circumstances particular to Rattoballi." The original opinion then stated, in complete disregard of Booker, that "While this alone does not render Rattoballi's sentence unreasonable, it means that the improper factors cannot be weighed in support of reasonableness in our review of a non-Guidelines deviation."

The amended opinion retreats from this clearly incorrect statement of the law. The same sentence now reads: "While this alone does not render Rattoballi's sentence unreasonable, it means that the sentence rests upon consideration that contradicts one of the § 3553(a) factors that we must consider in reviewing that sentence for unreasonableness - namely, the Commission's policy statements." Op. 23 fn.4. This is a good deal better, though the footnote's overall emphasis on re-enacting the mandatory Guidelines regime remains problematic.

The second change surrounds the statement, found in both the original and its amendment, that "A sentence must reflect consideration of the balance of the § 3553(a) factors; unjustified reliance upon any one factor is a symptom of an unreasonable sentence." In the original opinion, this bald claim -- which this Blog noted contradicted Fernandez's holding that the weight to be accorded any particular § 3553(a) factor rests entirely in the discretion of the sentencing court -- was followed solely by a "See" citation to the 6th Circuit's decision in Hampton and a "see also" citation to the 10th Circuit's decision in Cage. The amended opinion, however, adds a "cf." citation to, surprise surprise, Fernandez. Op. 26. The added citation states: "cf. Fernandez, 443 F.3d at 34-35 (stating that 'we will not second guess the weight (or lack thereof) that the judge accorded a given factor . . . [under § 3553(a)], as long as the sentence ultimately imposed is reasonable in light of all the circumstances presented.)") (emphasis in amended opinion).

This is a twisted reading of Fernandez. The unabridged version of the passage quoted by the amended opinion is as follows: "If the ultimate sentence is reasonable and the sentencing judge did not commit procedural error in imposing that sentence, we will not second guess the weight (or lack thereof) that the judge accorded to a given factor or to a specific argument made pursuant to that factor." 443 F.3d at 34-35. This Blog had read this statement to mean that appellants cannot argue that the district court gave unreasonable weight to any particular factor, and that apart from claims of procedural unreasonableness (i.e., that the court erred in the process of selecting the sentence), the only available argument is one of substantive unreasonabless -- i.e., that the sentence is simply too long or too short. On this reading, the amended opinion should have introduced the quoted passage from Fernandez with the "But see" introductory signal rather than the "Cf." signal. See BlueBook Rule 1.2 ("Cf." means that the "cited authority supports a proposition different from the main proposition but sufficiently analogous to lend support.").

In any event, this Blog actually prefers Rattoballi's twisted reading of Fernandez and its resurrection of the "excessive weight" argument in this Circuit. Defendants can now argue, consistent with Chief Judge Walker's amended opinion, that a sentence is unreasonable because the district court erred in relying excessively on § 3553(a)(4), the Guidelines range, in imposing sentence.

Tuesday, June 20, 2006

Burden of Truthful Disclosure, Required for Safety-Valve Relief, Remains on Defendant after Booker

United States v. Jimenez, Docket No. 05-2221-cr (2d Cir. June 5, 2006) (Walker, Newman, Sotomayor) (per curiam):

(By James Stull, rising 2-L at Stanford Law School and intern at FDNY)

The safety valve remains difficult to open for defendants convicted of drug offenses under 21 U.S.C. §§ 841, 844, 846, 960, and 963. In an opinion by Chief Judge Walker, the Circuit affirms a district court’s ruling that Booker does not shift the burden of truthful disclosure, required for safety-valve relief, to the prosecution to prove beyond a reasonable doubt. While Jimenez fulfilled four of the five factors required by § 3553(f) for safety-valve relief, at issue is the fifth factor, namely whether Jimenez revealed to the Government all relevant facts of the “offense or offenses that were part of the same course of conduct or of a common scheme or plan,” and, if not, whether it was his or the Government’s burden to prove it so.

Nelson Jimenez admitted distributing 400 grams of heroin during his guilty plea allocution, a fact that triggered a five-year minimum sentence under § 841(b)(1)(B). To escape that mandatory minimum, Jimenez met with prosecutors and told them that “his involvement was limited solely to the conduct that gave rise to his arrest.” The Government was unconvinced, however, due in large part to inconsistencies in Jimenez’s labyrinthian tale of a reckless dealer named “Primo,” his more circumspect minion, “fake Primo,” and an innocuous friend from New York City, whose charity toward Jimenez indicated either a fondness for lengthy periods of uninterrupted time spent in Jimenez’s company or a capricious desire for road-trips through the American South.

The district court conducted a Fatico hearing to resolve this dispute. After the hearing, the court concluded that Jimenez had not “carr[ied] [his] burden of establishing that he has satisfied the requirement” for safety-valve eligibility. The court remarked, however, that it may have ruled differently had the Government borne the burden of proof rather than Jimenez. The court thus sentenced Jimenez to the five-year mandatory minimum sentence.

Jimenez raised two claims on appeal: First, that Booker changes the nature of the safety-valve from what was once “merely a sentencing adjustment” within the Guidelines to what is now a gateway for imposing a non-Guidelines sentence. Because the safety-valve now implicates a non-Guidelines sentence, he argued that the burden of proving ineligibility under the truthful-disclosure component of the safety valve should shift to the Government. Second, that notwithstanding his own admission to “all facts necessary to trigger the imposition of the mandatory minimum sentence . . . the Sixth Amendment requires the government to prove beyond a reasonable doubt those facts which would render him ineligible for safety-valve relief.”
In response to Jimenez’s first claim, the Circuit reaffirmed its reasoning in United States v. Gambino, 106 F.3d 1105 (2d Cir. 1997), a pre-Blakely case holding that the defendant carries the burden of proof on the truthful disclosure prong of the safety valve. Here, as in Gambino, the Court sees the proof required for safety-valve eligibility as a part of, and not independent from, the burden shifting process of sentencing, generally: “a defendant who seeks to take advantage of a sentencing adjustment [whether a downward adjustment or a downward departure] carries the burden of proof” regarding that adjustment. Op.12. It would thus be unreasonable to “impose on the government five additional elements that it must prove before triggering the imposition of a mandatory-minimum sentence.”

The court disposes Jimenez’s second claim by referring to Holguin, a recent decision holding that judicial determination of a defendant’s eligibility for safety-valve relief does not violate the Fifth and Sixth Amendments. United States v. Holguin, 436 F.3d 111 (2d Cir. 2006), cert. denied, 547 U.S. ---, 2006 WL 1221968 (June 5, 2006) (click here for our discussion of Holguin). As it did in Holguin, the Court here distinguishes opportunities for sentence reduction from impositions of sentence enhancement. “Because the safety-valve provisions serve as a mechanism for reducing sentences, rather than increasing them, we held that Apprendi, Blakely, and Booker do not apply to the operation of the safety valve.” (Emphases in original).

The same is true here. Jimenez’s admission during his plea proceeding to distributing 400 grams of heroin triggered the five-year minimum sentence. No more is required. The five conditions for safety-valve eligibility are criteria “for a sentence reduction,” not elements of the offense that increase the maximum sentence. The Apprendi line of cases is thus inapplicable to the operation of the safety valve.

Monday, June 19, 2006

Fair Market Value Should Generally Be Used to Determine Value of Offset Property in Setting Amount of Restitution

United States v. Francis Boccagna, Docket No. 04-5099-cr (2d Cir. June 13, 2006) (Jacobs, Sack, Raggi):

(By Lara Samet, rising 2-L at NYU Law School and intern at FDNY)

Boccagna ran an intricate scheme. Distilled to its essentials, he made false statements to procure loan guarantees from the Department of Housing and Urban Development (HUD), purchased properties after obtaining those guarantees, and then quickly resold the properties for a profit. Unfortunately, the scheme proved too intricate even for him and eventually unraveled. Boccagna confessed to the authorities and later pleaded guilty.

By the time Boccagna’s crime was discovered, many of the 162 properties at issue were in foreclosure proceedings. HUD ultimately acquired title to approximately one-third of these by paying the outstanding loan balances and other out-of-pocket expenses. HUD suffered $20.6 million in losses as a result of Boccagna’s misconduct.

Instead of reselling the properties on the open market to recoup its losses, however, HUD sold the foreclosed property to the New York City Department of Housing Preservation and Development (HPD) at nominal prices. The sale price for all the properties was approximately $2 million, far below their fair market value. In return, the HPD guaranteed, among other things, that the properties would be developed as low-to-middle income properties.

In ordering restitution, the district court used the nominal amount recouped by HUD through the sales to HPD ($2 million) offset the total loss amount ($20.6 million). It thus ordered Boccagna to pay $18.6 million in restitution.

Boccagna appealed, arguing that the district court erred in using the nominal sale price to HPD, rather than the properties’ fair market value, to offset the loss amount for restitution purposes. The Circuit agrees, holding that the district court abused its discretion by using the nominal resale price to calculate the amount of restitution owed.

Judge Raggi writing for the Court begins by scrutinizing the text of the Mandatory Victims Restitution Act (“MVRA”), codified at 18 U.S.C. §§ 3663A, 3664. She concludes that while much of the statute is unambiguous, the MVRA does not expressly state how property is to be valued, either for determining the loss amount or the value of an offset. See also United States v. Simmonds, 235 F.3d 826, 831 (3d Cir. 2000) (“While the statute does not expressly define “value” as “replacement value,” neither does it define “value” as “market value.”). Moreover, the Court points out, the law recognizes a number of ways of proper valuation. See, e.g., BFP v. Resolution Trust Corp., 511 U.S. 531, 543 n.7 (1994) (foreclosure price); Simmonds, 235 F.3d at 832 (replacement value). Since there is no overarching default, the Court undertakes a more normative assessment of how restitution should be valued.

The Court concludes that “value” is a flexible concept under the MVRA. More often than not, however, fair market value will be the best measure. When the property is unique or whenever the market is incapable of capturing the true value of the good, though, a court can look to replacement cost or another mode of valuation. See United States v. Shugart, 176 F.3d 1373, 1375 (11th Cir. 1999) (century-old church); Simmonds, 235 F.3d at 832 (residential furniture with “personal value”). Judge Raggi would make most economists proud: Focus on the market value, she instructs, except when the market fails.

Although the Court recognizes that valuation should remain flexible, it expressly holds that the district court’s discretion is limited. The overarching principle is that a court cannot order restitution in excess of the amount of the victim’s loss. As Judge Raggi puts it, a court “cannot award the victim a windfall, i.e., more in restitution than he actually lost.” This limiting principle derives from the underlying purpose of restitution. Restitution is compensatory; it seeks solely to make the victim whole. The goal of a restitution order is simply to put the victim back in the same position s/he would have occupied but for the defendant’s crime.

By using the nominal sale price to offset the loss caused by Boccagna’s misconduct in setting the restitution amount, the district court improperly awarded HUD more than it actually lost. The restitution order here “effectively awards [HUD] both restitution in the full amount of loss offset only by the nominal sale price and the benefit of the recouped property to the extent that [HUD] is able to gift [HPD] in an amount equal to the difference between the property’s fair market value and the nominal sale price.” Op. 24. Such a valuation, Judge Raggi notes, “does not put the victim in the same position he would have been in but for the defendant’s criminal conduct; it puts him in a better position.” Id.

In other words, “the nominal price was not the only value HUD received for the properties.” Op. 24. It also “obtained HPD’s guarantee that the properties would be developed as low-to-middle income residences.” Id. And this “guarantee had a value to HUD equal, at least, to the market price that it decided to forego.” Id. The district court’s restitution order is erroneous because it allows “HUD to receive both the benefit of this development guarantee and a restitution award offset only by a nominal sale price.” Id.

Judge Raggi offers the following illustration to show why HUD is put in a better position (than it would have been in but for Boccagna’s misconduct) by virtue of the district court’s restitution order:

“If a theft victim suffered the loss of a jewel with a fair market value of $100,000, and if he thereafter recouped from the defendant a substitute jewel with a market value of $50,000, and if the victim sold the substitute jewel to his son for $1, the use of that nominal sale price as offset value would allow the victim to receive the benefit of both a $49,999 gift to his son, and $99,999 in restitution from the defendant, for a total recovery of $149,998 on his $100,000 loss.”

Op. 21. Such a restitution calculation contradicts the compensatory core of restitution, as it “would put the victim in a significantly better position than he was in before the theft.” Op. 21-22.

Despite the sound analysis, there is one glaring ground for concern – the Court’s cursory dismissal of the argument that this case might constitute a special exception. The Government pointed out that HUD sold the properties at nominal prices in order to create affordable housing opportunities. Of course, part of HUD’s mission is to spur the development of such housing. Therefore, the district court should be able to consider the nominal resale price to HPD. The Court disagrees:

"However laudable HUD’s motives in entering into its agreement with HPD, that fact does not help us resolve this appeal. The issue before us is not, after all, whether the district court could insist that HUD sell the foreclosure properties to the highest bidder. It could not. The issue is whether HUD’s voluntary decision to sell the foreclosure properties at a nominal rather than fair market price entitles it to recoup the difference between these two amounts as part of a restitution award . . .”

It may be appropriate to limit the possible measures that can be used to determine the amount of restitution that a defendant owes. It may be appropriate to limit any incentive to try to scam the system. But it seems incorrect to conclude that this was a “voluntary decision” and that there is no room for carving out an exception to the general rule. Under Boccagna, HUD now has every incentive to resell property on the open market to the highest bidder, rather than at nominal prices to organizations (like HPD) dedicated to developing low and middle income housing.

First Amendment Does Not Bar Sentencing Court from Considering Defendant's Writings to Rebut His Claims about His Character and Chance of Recidivism

United States v. Kane, Docket No. 05-2714-cr (2d Cir. June 19, 2006) (Meskill, Straub, Katzmann) (per curiam): This opinion primarily holds that while a sentencing court may not rely on a defendant's abstract beliefs (or writings) for the purpose of demonstrating that those beliefs / writings (and by extension the defendant) are "morally reprehensible" (and thus deserving of greater punishment), Op. 5, a court may properly consider such beliefs and writings when they rebut the defendant's mitigating evidence. Following Fernandez, the opinion also holds that the Circuit has jurisdiction to review a claim that the defendant's below-the-range sentence (of 24 months, down from the 30 to 37 months advisory range) was unreasonable. Finally, the opinion quickly upholds that sentence against an unreasonableness challenge, quoting Fernandez for the proposition that "reasonableness review does not entail the substitution of our judgment for that of the sentencing judge" and is akin to review for abuse of discretion. Op. 7. (One only wishes that the panel in Rattoballi (see below) similarly respected Fernandez's holding that deference, rather than searching scrutiny, is the correct posture on appellate review for substantive unreasonableness).

Regarding the principal issue on appeal, the essential facts are these. Kane pleaded guilty to defrauding the FHA and HUD through sham real estate transactions. Seeking a probationary sentence (the advisory range was 30 to 37 months), he claimed in his sentencing submission that he was, inter alia, an honest and charitable man who is genuinely sorry for his misconduct. These claims were supported by over 35 letters from family members and friends. Kane sought a probationary sentence on the basis of these claims, and also on the ground that he needed to remain at liberty in order to care for his ailing wife and that there was no real likelihood of reoffending.

To rebut these claims, the Government introduced excerpts from books that Kane had earlier published. We quote the opinion's rich description of these writings:

"In those excerpts, Kane penned how-to advice on topics ranging from wife 'training' to illegal real estate transactions. Specifically, he described how to convert 'single-family dwellings into rooming houses without it being legal,' a scheme that generated enough cash to fund his annual purchase of a new Cadillac Eldorado. He also gave advice on how to manipulate financial records so as to appear to qualify for subsidized housing, described running a fraudulent mail order scheme . . . , provided tips on how to avoid a sexual harassment suit while displaying photographs of topless women in the office, and in a work entitled 'Mastering the Art of Male Supremacy: Training Techniques for the Home Front,' set forth his philosophy of 'training a wife,' which eschewed real violence but endorsed use of 'a rolled up newspaper on the rump once in awhile.'"

Op. 3. Kane claimed that these writings were "jokes" made solely for entertainment purposes, but the sentencing court rejected this characterization. The court then looked to the writings and found that they contradicted Kane's claims regarding his honesty, desire to help his ailing wife, and unlikelihood to reoffend. As the opinion puts it, "the [district court] concluded that Kane's published advice on running real estate and mail order schemes undercut his professed honesty, and his guide to 'mastering the Art of Male Supremacy' tempered the sincerity of his spousal devotion." Op. 3-4.

The Circuit upheld the sentencing court's consideration of Kane's writings against a First Amendment challenge. While a court cannot consider a defendant's expressive activities for the purpose of determining that greater punishment is appropriate because the defendant is "morally reprehensible," Op. 5, quoting Dawson v. Delaware, 503 U.S. 159, 165 (1992), it may consider such activities "so long as it is relevant to the issues involved in the sentencing proceeding." Op. 4. "Among other possible uses," the Circuit explained, "a particular piece of evidence may be relevant to show motive, analyze a statutory aggravating factor, illustrate future dangerousness or potential recidivism, or rebut mitigating evidence that the defendant proffers." Op. 4-5.

Here, the sentencing court properly considered Kane's writings, since they undercut his claim that he is honest, charitable, and devoted to his wife. Moreover, since "much of Kane's writings concerned illegal real estate schemes, which related directly to his offense of conviction, the writings also 'may indicate the increased likelihood of recidivism or lack of recognition of the gravity of the wrong.'" Op. 5.

And as noted earlier, the Circuit upheld the 24-month sentence (below the 30 to 37 months advisory Guidelines range) against Kane's challenge that it was still unreasonably long. The Court deferred to the district court's considered judgment of the appropriate sentence, explaining that it will not "substitute [its] judgment for that of the sentencing judge." Op. 7. The Court thus upheld the sentence after noting only that "[t]he Judge considered the relevant sentencing factors in careful and reasoned fashion, premised his conclusion on a sound view of the facts, and understood the applicable legal principles." Op. 8. The Court described Kane as "merely renew[ing] the arguments he advanced below -- his age, poor health, and history of good works" -- in his challenge to the 24-month sentence, and rejected this effort as "ask[ing] us to substitute our judgment for that of the District Court, which, of course, we cannot do." Id.

Friday, June 16, 2006

Have the Mandatory Guidelines Been Reenacted?

United States v. Rattoballi, Docket No. 05-1562-cr (2d Cir. June 15, 2006) (Walker, Winter, Jacobs): Someone please wake us up: We read this opinion and had a nightmare that we lived either in another Circuit or in an alternate universe in which Booker had never happened. In an extraordinary act of law-making that flouts Booker and contradicts core post-Booker caselaw in the Second Circuit, including Crosby and Fernandez, C.J. Walker, along with former and future C.J.s Winter and Jacobs, writes as if on a clean slate (and as if this were the 7th or 8th Circuits rather than the 2nd) and overturns, for the first time since Booker was decided 17 months ago, a sentence as substantively unreasonable (i.e., just too short). Cynics will not be surprised that this occurred on a Government appeal of a below-the-range sentence, rather than a defendant's appeal of an above-the-range sentence.

The result is bad enough. But the opinion contains even worse general language that seemingly elevates the Guidelines range to a first-among-equals status in relation to the other 3553(a) factors and suggests that any non-Guidelines sentence will be treated skeptically on appeal. To support these assertions, which are not supported by Second Circuit precedent (and contradict, at least, Fernandez's holding that the advisory range deserves no presumptive treatment either at sentencing or on appellate review), C.J. Walker's opinion conspicuously relies almost exclusively on cases decided by the 1st, 7th, and 8th Circuits. Rattoballi has made new law in this Circuit, and new law that contradicts Crosby and Fernandez. We strongly urge defense counsel to seek en banc rehearing.

The essential facts are these. Defendant is the owner of a 12-employee printing company. To obtain and retain business from various advertising agencies, Rattoballi paid kickbacks, in the form of luxury goods and services (as well as cash), to the agencies' executives, especially one Mosallem of Grey Global. In exchange, the ad execs would steer their respective agency's printing business to defendant's company. To further curry favor with the ad execs, Rattoballi participated in a bid-rigging scheme that profitted the execs personally. The relevant events occurred from 1990 to 2001.

Rattoballi was charged with conspiracy to rig bids, in violation of the Sherman Act, and with mail-fraud conspiracy. He pled guilty pursuant to a cooperation agreement. He agreed to give truthful information, in particular, against Mosallem, and to testify against the latter if necessary. Mosallem later pled guilty, and we assume that Rattoballi's cooperation contributed to this result.

However, while preparing for Mosallem's trial, the Government discovered that Rattoballi had understated the amount of his kickbacks to Mosallem during proffer sessions. When confronted, Rattoballi admitted that he gave cash to Mosallem, as well as an $87,000 watch. Rattoballi also admitted that he discussed the Government's investigation with Mosallem, and that Mosallem asked him not to reveal the additional kickbacks to prosecutors.

At sentencing, the applicable range was 27 to 33 months, which included a 2-level reduction for acceptance of responsibility. The Government apparently urged a within-the-range sentence (we assume no 5K1.1 motion was made), and defense counsel sought a below-the range sentence.

Judge Griesa agreed with the defense and imposed a sentence of 1 year's home confinement, 5 years' probation, and $155,000 restitution. The court gave the following reasons for its sentence: (1) Rattoballi had pled guilty and "admitted the full range of his misconduct"; (2) the three-year investigation and prosecution had taken a toll on defendant and on his business; (3) his business would be destroyed if he were imprisoned; (4) not imprisoning Rattoballi would assist in the payment of restitution; and (5) Mosallem was the prime mover in the scheme and "exerted an enormous amount of pressure" on defendant to participate.

C.J. Walker examines each of the reasons and finds them deficient. Op. 20-24. But before doing so, he lays out the general contours of "substantive" reasonableness review on appeal -- i.e., review of whether a sentence is unreasonably long or short. And in so doing, he acts as if writing on a clean slate and ignores Second Circuit law while citing out-of-Circuit cases inconsistent with Second Circuit law.

After initially citing Crosby for the innocuous proposition that district courts must consider the Guidelines range after Booker, Op. 13, C.J. Walker's opinion then leaves the Second Circuit entirely. The opinion first claims, citing only to 1st and 7th Circuit opinions, that a judge may "not import [his/her] own philosophy of sentencing if it is inconsistent" with the 3553(a) factors. This is harmless taken at face value, but as the opinion later reveals, what C.J. Walker really means is, "inconsistent with the Guidelines range and policy statements."

Relying principally on the 1st Circuit (as well as the 4th, 7th, and 8th), C.J. Walker next asserts that "The guidelines cannot be called just another factor in the statutory list, 18 U.S.C. 3553(a), because they are the only integration of the multiple factors and, with important exceptions, their calculations were based upon the actual sentences of many judges." Op. 14. In addition to being new law, and new law that contradicts the language and spirit of Booker and Crosby (as well as Canova, Fleming, and Fernandez), this statement is flat wrong on all three subsidiary points: (1) the plain language of 3553(a) gives no priority to the Guidelines range or policy statements; nor does Booker; (2) far from "integrat[ing]" many of the 3553(a) factors, the Guidelines ignore or contradict the other factors (e.g., it ignores most relevant offender characteristics (age, health, prior good works) and considers only defendant's past bad acts. Moreover, even the Commission itself has admitted that the Guidelines' treatment of crack vs powder cocaine, as well as the Career Offender guidelines, cause unwarranted disparities); and (3) as Judge Cabranes and Professor Stith point out in "Fear of Judging," the myth of the Sentencing Commission's empiricism and rationalism is just that -- pure myth.

If the opinion ended there, it would have been bad enough. But C.J. Walker goes further, establishing for the first time that "we will view as inherently suspect a non-Guidelines sentence that rests primarily upon factors that are not unique or personal to a particular defendant, but instead reflect attributes common to all defendants." Op. 16. Nowhere in Booker or 3553(a) can such a principle be found. The opinion's sole explanation for this claim, rather, is that "[d]isparate sentences prompted the passage of the Sentencing Reform Act and remain its principal concern." Id.

And it gets worse. The opinion goes on to say that "several other circuits have endorsed the rule that requires district courts to offer a more compelling accounting the farther a sentence deviates from the advisory Guidelines range." Op. 18. Here, at last, the panel begrudgingly (if only implicitly) recognizes that it is not writing on a clean slate and that the Second Circuit has already rejected this position, as both Crosby and Fernandez held that the Guidelines hold no presumptively correct status, either at sentencing or on appellate review.

The opinion thus does not go so far as to adopt the rule in this case. But it then disingenuosly states that "we have yet to adopt such a rule in this circuit," id., and denigrates sentences deviating signficantly from the advisory range as "marginal sentences" that may require "a compelling statement of reasons that reflect consideration of 3553(a) and set forth why it was desirable to deviate from the Guidelines." Op. 19. This is an extraordinary departure from Second Circuit law (no pun intended). Nowhere is Fernandez mentioned, of course.

Query: What's the difference between a rule that requires "a compelling statement of reasons" to justify "deviat[ion] from the Guidelines" and a rule that requires the showing of exceptional circumstances to justify "departure from the Guidelines"? If the latter rule violates the Sixth Amendment, as the Supreme Court held in Booker, surely the former does as well.

The opinion's specific discussion of the factors relied upon by Judge Griesa is no better. First, it reasserts the claim that the district court erred by relying upon factors "common to all defendants." Op. 20. It then asserts that the court ignored a Guidelines policy statement suggesting that alternatives to confinement are inappropriate for antitrust offenders. Op. 21 (citing U.S.S.G. 2R1.1, cmt. n.5. Of course, the opinion makes no mention of 3553(a)(3), a statute explicitly requiring the sentencing court to consider the "kinds of sentences" available in imposing sentence.

Even worse, the opinion adds dicta in a footnote that would fully reenact the mandatory Guidelines regime invalidated by Booker. The opinion states that it is unclear from the record whether Judge Griesa relied on offender factors, such as vocational skill or employment record, in deviating from the Guidelines. Op. 22 n.4. It describes such factors as having been deemed “not ordinarily relevant” to the sentencing determination by the Commission and by Congress. It then gratuitously says that "to the extent that the district court relied upon these factors, however, it did not point to any circumstances extraordinary to Rattoballi . . . ." Id. (emphasis added). These "improper factors" therefore cannot be looked to in determining the reasonableness vel non of the sentence. Id. If there is any difference between the Guidelines-dominated world envisoned by this dicta and the Guidelines-dominated world struck down in Booker, we would love to know.

Finally, the opinion concludes that Judge Griesa relied too heavily on Rattoballi's history and characteristics under 3553(a)(1), asserting that "those considerations are neither sufficiently compelling nor present to the degree necessary to support the sentence imposed." Op. 25. It cites as support a 6th Circuit opinion holding that the district judge gave "too much weight" to the defendant's history and characteristics," and states that "a sentence must reflect consideration of the balance of the 3553(a) factors; unjustified reliance upon any one factor is a symptom of an unreasonable sentence." Id. (Except, apparently, when that factor is the Guidelines range or policy statements). That this statement contradicts Fernandez's holding that the weight to be accorded any particular 3553(a) factors rests entirely within the district judge's discretion is nowhere mentioned.

As stated at the outset, en banc rehearing of this decision is appropriate in light of its inconsistency with cases such as Crosby and Fernandez. The decision's seeming resurrection of the mandatory Guidelines regime also, of course, contradicts Justice Stevens's merits majority opinion in Booker.

Friday, June 09, 2006

Corrections Department May Not Unilaterally Add Term of Supervision to Sentence, even if Such Term Is Mandated under Law

Earley v. Murray, Docket No. 04-4098-pr (2d Cir. June 9, 2006) (Walker, Leval, Sotomayor): This seems an easy case, though the learned district judge somehow got it wrong. The Circuit (by the Chief, no less) reverses the district court and grants the writ to the habeas petitioner, concluding that state courts acted contrary to clearly established Supreme Court law (i.e., Hill v. U.S. ex rel. Wampler, 298 U.S. 460 (1936)) when they upheld the Department of Correctional Services's ("DOCS") unilateral post-sentencing decision adding a 5-year term of post-release supervision to Earley's sentence, even though the sentencing judge did not impose such a term either at sentencing or in the written judgment of conviction. Wampler held that "the only sentence known to the law is the sentence or judgment entered upon the records of the court" and that "until corrected . . . it says what it was meant to say, and this by an irrebuttable presumption." 298 U.S. at 464. Wampler established the principle that "the judgment of the court establishes a defendant's sentence, and that sentence may not be increased by an administrator's amendment." Op. 8; see id. ("The only cognizable sentence is the one imposed by the judge. Any alteration to that sentence, unless made by a judge in a subsequent proceeding, is of no effect."). The DOCS's unilateral amendment of Earley's sentence contradicts this principle.

It is irrelevant that the 5-year term of supervision was required under state law at the time of Earley's sentencing. See N.Y. Penal Law § 70.45. The appropriate remedy for the error, the Court explained, was for the state "to move to have the offending sentence vacated and the defendant resentenced by a judge" under N.Y. Crim. Proc. Law § 440.40. Thus, when DOCS discovered the error in Earley's judgment, "the proper course would have been to inform the state of the problem, not to modify the sentence unilaterally." Op. 11. And because "[t]he imposition of a sentence is a judicial act, . . . [t]he additional provision for post-release supervision added by DOCS is a nullity."

The outcome is especially sweet for Mr. Earley, who is currently incarcerated for violating the conditions of, you guessed it, the very same term of post-release supervision. The Circuit directs the district court (after first determining whether Earley's petition is timely under AEDPA, an issue the lower court left unresolved) to "issue a writ of habeas corpus excising the term of post-release supervision [] and relieving him of any subsequent penalty or other consequence of its imposition." Op. 12. And while the Circuit's "ruling is not intended to preclude the state from moving in the New York courts to modify Earley's sentence to include the mandatory term" of supervision, the plain language of § 440.40 requires such motions to be filed within one year of the entry of judgment, a deadline long ago passed in this case.

Is the Circuit's Website Not-So-Appealing?

Howard Bashman (of the must-read How Appealing blog) wrote this critique of the Second Circuit's website in a recent article for law.com ranking the websites of the various federal Circuits:

"My final bit of criticism is reserved for the New York City-based 2nd U.S. Circuit Court of Appeals, which allows visitors to access newly issued opinions via three types of searches. Unfortunately, those different methods often produce different results. There's no reason why an appellate court's Web site should require users to perform three searches to ensure that they have seen all newly issued opinions. The 2nd Circuit's site is alone among the federal appellate courts in creating this potentially confusing situation."

(Click here for the entire article). Unlike some courts, moreover, the Second Circuit's website does not allow on-line access to briefs (contra the 7th and 8th Circuits) or allow users to hear audio recordings of oral arguments (same). Nor does it contain a daily summary of decisions rendered (contra the 8th). Needless to say, Howard did not rank the Second Circuit's site as one of the better ones.

Thursday, June 08, 2006

Yet Another Misreading of Apprendi and Ring and Their Application to New York’s Persistent Felon Statute

Brown v. Miller, Docket No. 05-5014-pr (2d Cir. June 7, 2006) (Cabranes, Sotomayor, Raggi): In this disappointing opinion, the Circuit relies on the same ad hoc reasoning it first used in Brown v. Greiner, 409 F.3d 523 (2d Cir. 2005) (click here for our discussion), to reject the habeas petitioner’s claim that his sentence, imposed after the sentencing court determined that he was a persistent felon under N.Y. Penal Law § 70.10, violated the Sixth Amendment. The sole difference between this case and Greiner is that while this petitioner’s conviction became final after both Apprendi and Ring, the Greiner petitioner’s conviction became final after Apprendi but before Ring. This difference, in turn, alters the question presented on federal habeas in light of the AEDPA: While the question in Greiner was whether the state court’s decision upholding § 70.10 was an unreasonable application of Apprendi, the question here is whether the state court’s identical determination in this case was an unreasonable application of both Apprendi and Ring. The Circuit concludes that this is a distinction without significance and follows Greiner in rejecting the petition.

Section 70.10 requires two findings by the judge before s/he may impose the enhanced sentence: [1] the defendant must have been "previously convicted of two or more felonies," and [2] the judge must be "of the opinion that the history and character of the defendant and the nature and circumstances of his criminal conduct indicate that extended incarceration and life-time supervision will best serve the public interest." New York Penal Law § 70.10(2). In light of Apprendi’s holding that "any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt," Apprendi v. New Jersey, 530 U.S. 466, 490 (2000), the petitioner in Greiner argued that his enhanced sentence, based in part on finding [2], violated Apprendi. (Finding [1], of course, fits squarely under the Almendarez-Torres exception to the Apprendi rule).

The Circuit rejected this argument in Greiner, concluding that the state court did not act unreasonably in determining that the "amorphous" finding that a persistent felon sentence is required "to serve the public interest" differed from the kind of fact-finding at issue in Apprendi. While Apprendi "involved findings of specifically enumerated facts that were necessary to increase sentencing ranges," 409 F.3d at 534, the New York statute involved "a vague, amorphous assessment of whether, in the court’s ‘opinion,’ ‘extended incarceration and life-time supervision’ of the defendant ‘will best serve the public interest.’" Id. (quoting § 70.10(2)).

The Circuit relies on the same ad hoc distinction, found nowhere in the Supreme Court’s cases, to dismiss the petition in this case. Nowhere does the Circuit explain why such a distinction should make a difference for Sixth Amendment purposes. If a court cannot impose a greater sentence based on a narrow judicial finding that the defendant committed the crime for racist reasons, as in Apprendi, why should it be permitted to do the same based on a broader judicial finding that "the nature and circumstances of his criminal conduct" (§ 70.10) warrants such a sentence? Opportunities for circumvention of the Apprendi rule abound under the Circuit’s "amorphous" evasion of the Sixth Amendment.

Greiner is thus bad enough. But as this Blog noted, it is arguably defensible given that the universe of relevant precedents under AEDPA was limited to Apprendi. As Judge Gleeson pointed out in granting the writ in one of the cases consolidated in Greiner (only to be overturned by the Circuit), however, § 70.10 is functionally "identical" to the capital sentencing scheme struck down in Ring v. Arizona. Brown v. Greiner, 258 F. Supp.2d 68, 92 (E.D.N.Y. 2003). In the Arizona scheme ruled unconstitutional by Ring, a sentence of death -- though theoretically authorized by a jury verdict convicting a defendant of first-degree murder -- was unavailable without a judge finding at least one aggravating circumstance and the "absence of sufficiently substantial mitigating circumstances." 536 U.S. 584, 592 (2002). The latter finding is no less amorphous than finding [2] under § 70.10. Even assuming the validity of the Circuit’s "amorphousness" rescue of the state court in Greiner, therefore, no such assistance is available to the state court here, which acted after Ring was decided.

The Circuit’s sole response to this is that even Ring "involved a statute that required the sentencing judge to find some specified fact before imposing an enhanced sentence." Op. 9. Ring, of course, did not rely on this point in striking down the Arizona law. Nor did it distinguish the required finding of "one aggravating circumstance" from the required finding of the "absence of sufficiently substantial mitigating circumstances" in ruling that the statute as a whole violated Apprendi and the Sixth Amendment.

The sole bright spot is the Court’s explicit acknowledgment that the question of whether § 70.10 violates the Sixth Amendment in light of Blakely and Booker, in addition to Apprendi and Ring, remains open. Op. 9 fn.3. Additionally, the opinion does not rely upon or otherwise address the New York Court of Appeals’s equally but differently misguided decision in People v. Rivera, 5 N.Y.3d 61 (2005), which upheld § 70.10 against an Apprendi-Ring-Blakely-Booker challenge on direct appeal. Rivera did so by essentially rewriting the statute to permit an enhanced sentence based solely on finding [1] (and thus placing § 70.10 safely under the Almendarez-Torres umbrella). Op. 7. Click here for our critique of Rivera.

Monday, June 05, 2006

We Win!

Zedner v. United States, Supreme Court Docket No. 05-5992 (June 5, 2006): A big Congratulations to Ed Zas of this Office, as well as to Barry Leiwant and Sean Hecker, for winning the long and hard-fought appeal in Zedner. In a 9-0 decision by Justice Alito reversing the Second Circuit (click here for our critique of the Circuit's decision), the Court held that the protections of the Speedy Trial Act cannot be prospectively waived by the defendant and that harmless error analysis is not applicable when a district court makes no findings on the record to support an "interests of justice" exclusion under 18 U.S.C. § 3161(h)(8).

The only remedy for the Speedy Trial violation here, the Court held, is dismissal of the indictment (either with or without prejudice). Let us hope that wiser heads prevail on remand and end this long, sad saga.