Sunday, June 10, 2007

15-Level Downward Departure Is ... You Guessed It ... Reversed

Untied States v. Canova, Docket No. 05-6459-cr (2d Cir. May 8, 2007) (Meskill, Newman and Sack, C.JJ.) In this case, for the second time, the Court finds fault with the district court's lenient treatment of John Canova.

Facts: Canova was convicted after a jury trial of making false statements and various similar offenses, all the result of his efforts to obstruct a Medicare investigation into his pacemaker monitoring business. At his first sentencing, which was post-Booker, the district court imposed a Guideline sentence of one year's probation and a fine. It arrived at this sentence principally by concluding that there was no loss (the government alleged a $5 million loss) and granting a six-level downward departure for Canova's "extraordinary record of civil and public service." On the government's appeal, the Court vacated the sentence, holding that the district court's finding of no loss was error. However, the Court remarked that the district court could reconsider the extent of the downward departure in light of the higher range that would result from a proper loss calculation.

When the district court resentenced Canova, it imposed the same sentence, using a different methodology. It calculated the sentence under the Guidelines, this time factoring in a $5 million loss, then granted a fifteen-level downward departure.

Ruling: The Court vacated the sentence once again, finding fault with almost all of the court's grounds for departing.

The Court first held that the lower court abused its discretion in holding that the $5 million loss overstated the seriousness of the offense because the district court considered only the actual harm, and not the intended harm. The Court warned, however, that this departure might not apply in cases like Canova's at all, which was substantially different from the example in the Guideline's commentary. The Court also took issue with the district court's conclusions that Medicare's own conduct or the defendant's restitution were grounds for departure.

Finally, the Court embarked on a lengthy, but ultimately inconclusive, discussion of the substantive reasonableness of the sentence. There is no "particular method for assessing the extent of a departure in order to determine its reasonableness," but "it seems evident that the starting point should be considered." Here, the Court was clearly troubled by a departure that reduced the top of the applicable range by eighty-nine percent, and was even more troubled with the "blunt fact" that the district court treated Canova as though he intended to cause no loss at all, despite the Court's instruction in the first appeal that Canova caused some actual loss and intended a loss of $5 million. The Court indicated that imposing the same sentence on remand in such circumstances would "require a persuasive justification," but made "no ultimate ruling on the reasonableness of the departure," preferring instead to wait until the district court expressly considered the impact of the intended loss on Canova's ultimate fate.

Comment: This all looks pretty grim for Canova, but it should be noted that the Court rejected the government's request that the case be remanded with instructions that the district court impose a sentence of at least twelve months' imprisonment. All the Court did at this stage was urge "careful reconsideration in light of this opinion." If Canova's case illustrates anything, it is the post-Booker truism that what the district court says when imposing sentence is just as important as what it ultimately does. Let's hope, for Canova's sake, that the district court gets it right on the third round.


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