Supervised Release - Consecutive sentences allowed upon revocation

In US v. Joseph Dees, No 05-4949 (Nov. 8, 2006), the Circuit joined with six other circuits in ruling that under 18 usc sect 3584(a), a district court may "impose consecutive terms of imprisonment upon revocation of supervised release -- even when the sentences for the underlying crimes ran concurrently."

Dees had pleaded guilty on three separate dates to three separate offenses. He was sentenced, however, for all 3 cases at the same time by one judge. The sentence was 51 months in prison and 3 years supervised release on each of three separate convictions to run concurrently. Dees served his sentence and upon release accumulated multiple violations of his release conditions. At a violation hearing, the judge revoked supervised release and imposed 24 months in prison on each of the three supervised release terms, to run consecutively, for a total of 72 months. The Circuit found that nothing in the statute precludes such consecutive sentences upon violation, even though the original terms of supervised release ran concurrently.

Third Circuit finds unlimited "but for" theory of restitution calculation erroneous; reiterates admissibility of custom & practice testimony

On December 12, 2006, the Third Circuit ruled in United States v. Fallon, Case No. 03-4184, that awarding restitution owed under the Mandatory Victims Resolution Act ("MVRA") pursuant to a theory of unlimited "but for" causation is error requiring a new restitution hearing. The Third Circuit also held that the exclusion of testimony about industry custom and practice was error as a matter of law, but that such error was harmless in this case.

At the restitution hearing, the district court found by a preponderance that American Business Leasing ("ABL"), which had purchased microdermabraders from Mr. Fallon’s company and then leased the devices to doctors, would not have purchased the devices but for Mr. Fallon’s forgery of the FDA approval letter that Mr. Fallon provided to ABL during their negotiations. The district court consequently found that all of ABL’s losses from unpaid lease payments were caused by Mr. Fallon’s misrepresentation. It assessed restitution of over $55,000 ($125,000 in unpaid lease payments, minus about $30,000 for paid lease payments and $40,000 for the value of the devices owned by ABL).

On appeal, the Third Circuit vacated this award as erroneous and remanded the case for a new restitution hearing. The Third Circuit ruled that while "a . . . rebuttable inference arises that subsequent losses suffered by the victim are sufficiently linked to the underlying fraud to support an award of restitution" where a "transaction was consummated due to [the defendant’s] fraud," the argument that no loss would have occurred but for the fraud is insufficient to bear the government's burden of showing direct causation of the harm where, as here, the defendant rebuts the presumption with evidence that the loss occurred for reasons unrelated to the fraud. Mr. Fallon showed that at least $34,000 of ABL’s loss arose when two doctors defaulted on their lease payments for reasons unrelated to the fraud. One doctor filed for bankruptcy. The other passed away.

The Third Circuit also reiterated in this opinion that "[t]his court has consistently allowed ‘testimony concerning business customs and practices,'" and that "a witness need not represent an entire industry in order to have sufficient knowledge of that industry’s customs and practices so as to render substantial assistance to the jury." The Court consequently found the district court's exclusion of Mr. Fallon's proffered custom and practice testimony to be erroneous. However, it went on to hold that such error was harmless in this case because Mr. Fallon was able to impeach the testimony of the government witness who testified that the FDA approval letter was a required part of the negotiations, and because another witness testified that he had never required such approval letters from device manufacturers during his fifteen years in the leasing industry.

Another guideline sentence affirmed, more specific reasons for sentence not required

On November 28, 2006, the Third Circuit issued another precedential decision affirming a within-guideline sentence. In United States v. Lloyd, No. 05-4241, the defendant pled guilty to a drug conspiracy and faced a range of 168-210 months. The district court imposed 168 months and, after a Booker remand, imposed the same sentence. The court reaffirmed its practice of applying plain error review to an unpreserved argument that the district court failed in its procedural approach to sentencing. While counsel may have strategic reasons for not making certain objections, any hope of meaningful review on these questions requires an objection in the district court. The court found no plain error in the failure to give more specific reasons, stating that "a court can provide concrete reasons for its sentence without speaking at great length." Also, the court found no plain error in failure to give greater weight to the defendant's post-sentencing rehabilitation efforts, concluding that such efforts will only be relevant in unusual circumstances given the unfair disadvantage of defendants who have no opportunity to come back for resentencing. The court also concluded that the sentence was reasonable.

3d Cir emphasized adherence to Gunter in finding sentence reasonable

The Third Circuit in United States v. Charles, No. 05-5326, emphasized reliance on the three-step sentencing procedure articulated in United States v. Gunter, No. 05-2592. In rejecting appellant's arguments that his sentence was unreasonable, the Court held that the district court complied with steps one and three by determining the applicable guideline range and discussing the parties' arguments regarding his background and personal circumstances. Analogizing to United States v. King, No. 05-1728, the Court determined that the record supported a maximum guideline sentence of 46 months. The Court rejected Charles's parsimony argument that the district court was required to note why a low-end guideline sentence was insufficient to meet section 3553(a)(2)'s penological goals, and his argument regarding unwarranted disparities, stating that any alleged disparities here were non-statutory and resulted from the district court's reasonable exercise of discretion after considering the requisite three steps for calculating sentences.

Letter classification of offense under § 3559(a) does not require reference to guidelines

The Third Circuit in United States v. Lovett, No. 05-4171 (3d Cir. Nov. 6, 2006), rejected the contention that under § 3559(a), the "maximum term of imprisonment authorized" is based on the maximum term of imprisonment authorized by the Guidelines, rather than the statute of conviction. Lovett received a 16-month sentence for his conviction of making a false statement to a federally licensed firearms dealer in violation of 18 U.S.C. § 922(a)(6), and, on appeal, challenged only the imposition of his three-year term of supervised release. Since his range would have been 12-18 months, he argued, he would have thus been classified as a Class E felony, for which the term of supervised release would not have exceeded one year. The Third Circuit rejected the argument, reasoning that the classification process in § 3559 requires, first, identifying the offense of conviction, then, if a letter grade has not been assigned, looking to the "maximum term of imprisonment authorized." Because § 3559(a) refers to the "section defining" the criminal offense, the Court concluded that this can only refer to the Federal Crimes Code, not the sentencing guidelines.

Mummert Survives Booker, but Sentences Require Minimal Explanation

The Third Circuit has carried its rule requiring remand of ambiguous departure rulings forward into the post-Booker world. The doctrine, originating in United States v. Mummert, 34 F.3d 201 (3d Cir. 1994), stemmed from the need to determine whether the appellate court had jurisdiction to hear an appeal challenging a Guidelines sentence--legal departure denials were reviewable while discretionary denials were not. Since sentencing courts must still rule on departure motions in the Third Circuit, and since reviewability of such rulings still turns on their legal or discretionary nature, Mummert continues to serve a purpose, the Court held in United States v. Jackson, No. 05-4091 (3d Cir. Nov. 9, 2006).

Unfortunately, Jackson continues the Court's trend of watering down Mummert. In this case, although the district court never addressed the departure motion at all, the Third Circuit infers that the "implicit denial" of the motion was discretionary, since it viewed the government's opposition to the motion below as appealing to the district court's discretion. That is a controversial conclusion, as the government below and on appeal argued that the facts presented by Mr. Jackson do not "rise to the level" needed for a departure---seemingly a legal argument.

Jackson likewise seems to confirm that the Third Circuit will approve very "bare bones" explanations of sentences by district courts. Here, the sentencing court cited Mr. Jackson's criminal history and expressly rejected one of his mitigation arguments in imposing a Guidelines sentence, but was silent as to many other mitigating factors presented as well as to the departure motion. That explanation was upheld as sufficient.

A rehearing petition is pending in Jackson, asking the Court, among other things, to establish a supervisory rule requiring express and clear departure rulings, and to require district courts, as part of the explanation of sentence, to state why they reject any non-frivolous sentencing arguments made by the parties.

UPDATE: Rehearing has been denied.