Delay in delivering court order caused by prison authorities excluded from time to file motion for reconsideration

In Long v. Atlantic City Police Department, et al.,  No. 06-4732 (11/9/2011), Mr. Long sought to extend the time for filing an appeal from a Fed.R.Civ.Pro. 59(e) ruling under Fed.R.App.Pro. 4(a)(4)(A) due to prison authorities’ obstruction of the delivery of the Fed.R.Civ.Pro. 59(e) dismissal.  Long had sued the Atlantic City Police Department , the New Jersey State Police, and some police officers and forensic chemists alleging some sort of conspiracy which prevented him from proving his innocence.  Screening the compliant resulted in the district court’s dismissing the complaint sua sponte before the defendants had been served.  The order and memorandum opinion were docketed on August 21, 2006, giving Long until September 4, 2006 to file a motion under Rule 59(e). However, on September 25, 2006, after the expiration of the appeal period, he filed a motion for reconsideration pursuant to Rule 59(e), along with a letter explaining that he had not received the district court’s filings until September 22, 2006. His transfer to another prison facility caused a delay due to the prison forwarding the filings form his old to his new prison. He claimed he told the district court of the move. The district court treated the motion as timely due to the delay, and rejected his motion on the merits.  On appeal, the Court had to consider both the motion for reconsideration was timely and if so, whether it was properly dismissed on the merits.

The Court first noted that it had held in United States v. Grana, 864 F.2d 312 (3d Cir. 1989), abrogated on other grounds by Virgin Islands v. Martinez, 620 F.3d 321 (3d Cir. 2010) the delay caused by prison authorities in delivering an adverse order could be excluded from the time to file a criminal appeal. The Court later applied that rule in a §2255 case to appeals under Fed.R.App.Pro. 4(a)(4)(A). This reasoning led the Court to conclude that the rule excluding delays in delivering an order due to prion delay could also apply to reconsiderations orders under Fed.R.Civ.Pro.59(e) when delivery of district court orders are delayed by prison authorities’ actions. The Court accepted Long’s certification, that stated that false statements would subject him to punishment that the documents were incorrectly mailed to the wrong prison and that his new prison opened legal mail before delivering it to prisoners.

Prisoner who through no fault of his own did not receive notice of district court order dismissing his civil action not entitled to file a late appeal to the court of appeals

The lesson of Baker v. United States Government Officials, Nos. 08-2288 and 08-2365 (February 13, 2012)— which applies to appeals of civil orders (including those under §§2244 and 2255)— is that no news for five months means check the district court dockets.  Baker filed a tort claim in the U.S. District Court for the Western District of Pennsylvania alleging he was harmed by second hand smoke in his prison.  While the case was pending in 2005, Baker was transferred from FCI Lisbon (the opinion notes that there is no FCI Lisbon but rather an FCI Elkton in Lisbon, Ohio, but in order to avoid confusion, the opinion adopted the prison name used in the docket entries) to FCI Lewisburg.  On July 11, 2006, the district court granted the government’s Fed.R.Civ.Pro 12(b)(6) motion, but sent the dismissal order to FCI Lisbon, [and] as a result, the order was returned to the district court.  No one in the clerk’s office made any attempt to locate Baker.  Seven months later, on February 9, 2007, the docket notes that Baker sent a letter to the clerk in December, 2005 notifying the clerk’s office of his new residence in Lewisburg. A second February 9, 2007 entry notes that Baker wrote to the clerk explaining that he had received word of the dismissal when he received a docket sheet and as a result filed neither an appeal or motion for reconsideration. He asked for a copy of the dismissal order and was sent one — on January 7, 2008!

            Before receiving the dismissal motion, Baker, on May 31, 2007, filed several motions, among them: a post-judgment motion under Fed.R.Civ.Pro. 60(b); a motion to file a notice of appeal under Fed.R.Civ.Pro. 4(a)(1); a motion to toll the time to take an appeal under Fed.R.Civ.Pro. 4(a)(4); and a motion to reopen the time to take an appeal under Fed.R.Civ.Pro. 4(a)(6). On January 16, 2008, Baker supplemented his May 31, 2007 motion, filing a motion to alter or amend the judgment under Fed.R.Civ.Pro. 59(e). In all of these motions Baker blamed the prison for his not receiving the dismissal order, preventing him from filing timely motions.  On January 31, 2008, the District Court denied all of the motions.  Baker filed another motion to reconsider under Fed.R.Civ.Pro. 59(c). This was denied on April 10, 2008, and Baker filed a timely appeal from that order.

Baker sought rulings that his appeal of the July 11, 2006 dismissal was timely pursuant to Fed.R.App.Pro 4(a)(4) and (6). Fed.R.App.Pro 4(a)(4) allows a district court to reopen the appeal period for fourteen days after the date to reopen is entered if it finds that the moving party did not receive notice of the order under Fed.R.Civ.Pro. 77(d) within 21 days of its entry, the motion is filed 180 days after judgment is entered or 14 days after Fed.R.Civ.Pro. 77(d) notice of entry of the judgment is received (whichever is earlier), and the district court finds no party would be prejudiced.  Fed.R.App.Pro 4(a)(6) allows the time to appeal to run from the date of a ruling on a timey filed Fed.R.Civ.Pro. 59 motion.

The Court first dealt with the Fed.R.App.Pro 4(a)(6). Baker asserted that the time to file his Fed.R.Civ.Pro. 59 motion ran from February, 2007, when he learned of the July 11, 2006 order.  Relying on Bowles v. Russell, 551 U.S. 205 (1977), the Court ruled that Rule 4’s time limits cannot be equitably tolled, as the time limit to appeal is derived from a statute, it is jurisdictional, and courts are without power to expand them. The delay caused by the prison sending the notice back to the district court, rather than forwarding it to Baker, could not be subtracted from the time between the issuance of the order and the time the appeal was due.  The mailbox rule for determining when a prisoner files a document does not stretch so far to allow the entry of an order to be the date a prisoner receives it.

The Court then dealt with whether under Fed.R.App.Pro 4(a)(4) his Fed.R.Civ.Pro. 59 motion could be deemed timely, allowing his appeal to proceed.  The Court ruled, on the same day it ruled on Baker’s case, in Long v. Atlantic City Police Department, No. 06-4732 (February 13, 2011), that a Fed.R.Civ.Pro 59(e) motion can be deemed timely when a prisoner alleges and proves that prison official delayed or interfered with the delivery of a final order of the district court.  Baker’s problem was not the prison though.  Rather, the error was the district clerk’s sending the notice of the dismissal to the wrong prison. Charitably, the Court noted, “We recognize that this conclusion works an unfortunate result for Baker.  The result is distressing, given that the clerk’s office seriously erred in failing to update Baker’s address of record until more than a year had passed from when he notified the District Court of his move.”  (Perhaps this soothes Baker’s inner Mr. Bumble.)  As a result the only order the Court could review was the district court’s ruling that the Fed.R.Civ.Pro. 59(e) was not timely filed, and that, the Court of Appeals ruled, was correct.

Defendants in Multi-National, Internet-Based, Controlled-Substance-Distribution Case Seek Relief on Multiple Grounds Without Success

In United States v. Bansal, Nos. 06-1370, 06-2535, 06-2536, 06-3043, 07-1525, 07-1526, 07-4618, 09-1827 (3d. Cir. December 14, 2011), the Third Circuit discussed and then denied 13 of the 75 issues presented in this case involving a multi-national, internet-based, controlled-substance-distribution scheme. In the interest of brevity, the issues addressed in this 69-page opinion are as follows:

(1) Whether the money laundering convictions impermissibly merge with the underlying predicate felonies under United States v. Santos, 553 U.S. 507 (2008)?

(2) Whether the indictment insufficiently stated the elements of a CCE offense, and whether the conviction was flawed due to improper jury instructions and insufficiency of the evidence?

(3) Whether various emails intercepted pursuant to two warrant-authorized wiretaps should have been suppressed because they were not immediately sealed upon the warrant’s expiration pursuant to 18 U.S.C. § 2518(8)(a), which requires that the recordings of the contents of any wire, oral or electronic communication obtained pursuant to a search warrant be sealed immediately upon the expiration of the period fo the order?

(4) Whether the District Court violated Apprendi v. New Jersey, 530 U.S. 466 (2000), during sentencing because the jury made no finding of fact as to whether the substances involved in the case were Schedule II, III or IV substances?

(5) Whether the conspiracy convictions are invalid on the ground that the underlying conduct the government alleged, distribution of controlled substances via the internet, was not illegal at the time of the indictment?

(6) Whether the money laundering convictions are invalid because the money was laundered from lawful sources, i.e. because it was legal at the time to sell controlled substances over the internet without prescriptions?

(7) Whether the conspiracy conviction was a misdemeanor rather than a felony - - a conclusion that if correct, might undermine the money laundering conviction which requires proceeds to be from specified felonies, alter the Sentencing Guidelines calculations or bear upon the mutual understanding of the forfeiture agreement?

(8) Whether the grand jury proceedings were tainted by the presence of an allegedly improperly appointed Special AUSA; whether prosecutors made material misstatements and elicited false testimony during the grand jury proceedings; whether the indictment insufficiently stated the elements of the CCE charge because it did not allege with particularity three predicate felonies upon which a valid CCE charge must rely; and whether the District Court improperly limited public and press access to the pretrial jury selection procedures when it conducted a portion of the voir dire (individual voir dire) about sensitive subject in the presence of the parties in a closed jury room adjacent to the courtroom?

(9) Whether the District Court erred when it failed to suppress evidence obtained from the internet service providers that managed his email accounts because the five magistrate judges who issued the warrants lacked jurisdiction to do so because the warrants were ultimately executed on internet service providers in California, the warrants were unconstitutional general warrants, the warrants were invalid because they lacked probable cause, and the agents executing the warrants failed to adhere to the notice requirements of Rule 41 when they did not provide the defendant with a copy of the warrants; whether the District Court erred when it failed to suppress evidence obtained during the search of a garage because the garage was beyond the curtilage; whether the District Court erred when it failed to suppress evidence obtained from the defendant’s vehicle after his arrest?

(10) Whether the government presented sufficient evidence at trial to support the jury’s verdict of guilty with respect to the controlled substance distribution and importation charges?

(11) Whether various items of evidence (domestic and foreign business records, Excel spread sheets, bank check and wire-transfer exhibits, testimony of IRS Agent re domestic and international wire transfers, website screenshots, and summary exhibits) were admitted at trial in violation of the 6th Amendment’s Confrontation Clause and the Federal Rules of Evidence?

(12) Whether the District Court erred when it instructed the jury on certain matters including, advising them as a matter of law that each of the drugs listed in the indictment were controlled substances, the definition of "business enterprises involving narcotics", a cautionary instruction re cooperating witnesses and its instruction to consider whether witnesses who have pleaded guilty have an incentive to lie, instructing the jurors to "seek the truth", a "willful blindness" instruction re deliberate indifference, and an instruction on the elements of conspiracy and on the intent element of felony misbranding?

(13) Whether the government withheld exculpatory evidence (certain intercepted phone calls, emails, an indictment filed against coconspirators in New York, proffer statements from one of coconspirators and impeachment evidence against a coconspirator) in violation of Brady v. Maryland, 373 U.S. 83 (1963), and whether the government intruded into the defense camp by intercepting telephone calls he made while incarcerated in a federal detention center?

AMD 691 Vitiates Precedent that USSG §2K2.1(b)(6) Does Not Apply When the Predicate is Burglary of the Firearms that are the Subject of the Conviction

In United States v. Keller, Nos. 11-1172-1173 (3d. Cir. December 14, 2011), the Third Circuit vacated the sentence in this burglary of a gun shop case and remanded to the District Court to recalculate the guidelines range by applying the four-level enhancement in USSG §2K2.1(b)(6) for use or possession of any firearm or ammunition in connection with "another felony offense".

Keller pled guilty to conspiracy against the United States, stealing firearms from a federally licensed firearms dealer and possession of unregistered firearms, in violation of 18 U.S.C. §§ 371, 922(u), and 26 U.S.C. § 5861(d). Although the Probation Office included the four-level enhancement in Keller’s guidelines calculations, the District Court found that the enhancement did not apply. The Government then appealed.

In ruling in favor of Keller, the District Court followed existing Third Circuit precedent in United States v. Fenton, 309 F.3d 825 (3d Cir. 2002), United States v. Lloyd, 361 F.3d 197 (3d Cir. 2004) and United States v. Navarro, 476 F.3d 188 (3d Cir. 2007).

However, in 2006, the Sentencing Commission proposed an amendment to USSG §2K2.1 in order to resolve a Circuit conflict (Amendment 691). This amendment removed Application Note 15, which said that "another felony offense" refers to offenses other than explosives or firearms possession or trafficking offense, and inserted a new Application Note 14 which said that the enhancement applies if the firearm or ammunition facilitated or had the potential of facilitating "another felony offense" or another offense. It also indicated that the enhancement applies in a case in which a defendant who during the course of a burglary finds and takes a firearm, even if the defendant did not engage in any other conduct with that firearm, during the course of the burglary, and in the case of a drug trafficking offense, in which a firearm is found in close proximity to drugs, drug manufacturing materials, or drug paraphernalia. Amendment 691 noted that the enhancement is warranted because the presence of the firearm has the potential of facilitating "another felony offense" or another offense. The Third Circuit held that it was bound by this commentary, as provided in United States v. Stinson, 508 U.S. 36 (1993).

Despite that fact that the Circuit held in Fenton that the offense of burglary to steal firearms could not serve as the predicate for a USSG §2K2.1(b)(6) enhancement, the Commission sided with those courts of appeal that had held to the contrary. Therefore, the rule stated in Fenton and reaffirmed in Lloyd and Navarro is no longer valid to the extent it was applied to the burglary and drug trafficking offenses referenced in Application Note 14.

Finally, the Court determined that Amendment 691 is not plainly erroneous or inconsistent with USSG §2K2.1(b)(6), as provided in Stinson, 508 U.S. at 47.

The Second Amendment does not protect a person legally entitled to possess a firearm who lives with a felon from being charged with aiding and abetting under 922(g). And in determining the sufficiency of the charge in defendant’s Rule 12(b)(3)(b) motion to dismiss, the District Court should not ordinarily stray outside the four corners of the Indictment.

In United States v. Huet, No. 10-4729 (3d Cir. Jan 5, 2012), Police executed a valid search warrant of a home shared by Melissa Huet and Marvin Hall — Hall happens to be a convicted felon. In the course of the search, police found a firearm. The Government charged Hall with illegal possession of a firearm under 18 U.S.C. § 922(g), and charged Huet with aiding and abetting his possession, also under § 922(g).

Huet filed a motion under Rule 12 (b)(3)(B) to dismiss the charge on grounds that the Indictment failed to state an offense under § 922(g), and also argued that, as a non-felon legally entitled to possess a firearm, she enjoys protection under the Second Amendment. The District Court agreed, and dismissed the Indictment as to Huet.

In determining the sufficiency of the charge, the District Court took into consideration discovery, the affidavits of probable cause supporting the search warrant, and the prosecutor’s remarks made during Hall’s guilty plea hearing. The District Court concluded that this evidence failed to establish a connection between Huet and Hall’s possession.

The District Court then went to rule that even if the Indictment did properly charge a § 922(g) violation, it violated Huet’s Second Amendment rights because otherwise it would eliminate “the right of a sane, non-felonious citizen to possess a firearm in her home simply because her paramour is a felon.”

The Government appealed, and the Third Circuit reversed and remanded.

First, the Court observed that the Indictment properly charged Huet with aiding and abetting under § 922(g): it alleged that Hall was an illegally possessing felon, and that Huet knew or had reason to know Hall was prohibited from possessing a firearm, and rendered aid or assistance in Hall’s possession. The Court characterized the District Court’s review of facts outside the four corners of the Indictment as a “novel procedure” that “impermissibly expanded the scope of its review at the Rule 12 stage” since in reviewing a Rule 12 motion, the court must accept as true all facts alleged. The Court noted, without deciding, that if there were a stipulated record or if immunity issues were implicated, a Rule 12 dismissal might be justified on sufficiency of evidence grounds — but that’s not this case. Finally, the Court ruled that the District Court erred in faulting the Government for not including in the Indictment specific facts on how Huet aided and abetted. The Court said that the Indictment satisfied Rule 7(c)(1)’s requirement of a “plain, concise, and definite written statement.”

With respect to the Second Amendment argument, the Court pointed to the language in District of Columbia v. Heller, 554 U.S. 570, 626-27 (2008), that “nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons.” The Court stated that — contrary to the Fifth and Tenth Circuits — it had “explicitly held “in United States v. Barton, 633 F.3d 168, 171, that this language was not dicta, and so bound the court.

As a consequence, the Court held that the Second Amendment does not shield Huet from being charged with aiding and abetting a felon to possess a firearm, reasoning that Huet’s status as a non-felon was irrelevant. Although Huet could legally possess a firearm, she could violate § 922(g), by aiding and abetting a felon: the Second Amendment does not permit Huet to facilitate Hall’s illegal possession.

Attorney's failure to conduct adequate investigation of mitigating circumstances constituted ineffective assistance of counsel

In Blystone v. Horn, Nos. 05-9002 & 05-9003 (3d Cir. Dec. 22, 2011), the Third Circuit denied the government's cross-appeal and upheld the district court's conclusion that trial counsel in a capital case provided ineffective assistance of counsel by failing to adequately investigate mitigating circumstances for the defendant's punishment phase of his death penalty case even though the defendant had indicated that he did not wish to present a mitigation case to the jury. The Court held that the duty to conduct a reasonable investigation of mitigating evidence exists independently of the duty to present a mitigation case to the jury. In fact, the Court found, the duty to conduct a reasonable investigation is a "necessary predicate" to the decision of whether to present a mitigation case.

Here, the trial attorney conducted a minimal investigation involving only four of the defendant's family members. He solicited no expert mental health testimony and failed to examine extensive institutional records accumulated by the defendant because the defendant had chosen to forego the presentation of his own testimony and that of his family members. The Third Circuit concluded, however, that the fact the defendant had chosen to forego presentation of the mitigating evidence the lawyer had collected did not permit the inference that, had counsel competently investigated and developed expert mental health evidence and institutional records, the defendant would have also declined their presentation.

With regard to the defendant's direct appeal, the Third Circuit held that a timely Rule 59(e) motion to amend or alter a judgment based on newly discovered evidence is not a second or successive petition, whether or not it advances a claim, and therefore such a motion lies outside the reach of AEDPA's jurisdictional limitations on collateral attacks. Nevertheless, the Court found that the defendant's evidence was not newly discovered as it had been in the defendant's possession for many months before the district court denied habeas relief. Accordingly, the Third Circuit affirmed the district court's denial of the defendant's Rule 59(e) motion.

Fact that co-conspirator helped plan robbery that led to high speed chase insufficient to warrant U.S.S.G. §3C1.2 enhancement

Defendant Dwayne Cespedes was part of a three-member conspiracy which planned and executed an armed bank robbery. After removing more than $20,000 from the bank safe, Cespedes and co-conspirator Michael Grant entered the getaway car driven by co-conspirator Curtis Whitehurst. Whitehurst refused to submit to an attempted traffic stop and led police on a high speed chase through two counties. During the chase, Cespedes and Grant got out of the car and fled on foot, while Whitehurst continued his reckless driving, ignoring traffic laws, running stop signs, traveling in the wrong direction on certain roads and nearly striking several pedestrians in a crosswalk.

At Cespedes's sentencing, the district court applied a two-level enhancement for recklessly endangering others while fleeing from law enforcement officers pursuant to U.S.S.G. §3C1.2. The court rejected Cespedes's objection that the enhancement was improper because he never possessed control over the getaway vehicle and had exited the vehicle due to his co-defendant's erratic driving. On appeal, the Third Circuit, in United States v. Cespedes, No. 10-3432 (3d Cir. December 21, 2011), joined a number of other circuits in concluding that some form of direct or active participation by a defendant is required in order to apply the §3C1.2 enhancement. The Court noted that Application Note 5 to §3C1.2 provides that a defendant is only accountable for the reckless conduct of another under §3C1.2 if the defendant "aided or abetted, counseled, commanded, induced, procured, or willfully caused" the reckless conduct. Thus, where a defendant is merely a passenger in a vehicle fleeing from police, a district court must clearly indicate on the record how the defendant was responsible for the driver's conduct. The proof here, indicating only that the conspirators collectively planned a robbery that led to a high speed chase was inadequate to qualify Cespedes, a passenger in the getaway car, for a reckless endangerment during flight enhancement. Accordingly, the Court vacated Cespedes's sentence and remanded his case for resentencing without the enhancement.

Court Errs by Not Considering Postsentencing Rehabilitation on Remand after Pepper

In United States v. Salinas-Cortez, No. 11-1580 (3d Cir., November 8, 2011), the defendant challenged the sentencing court’s rejection of his request for a downward variance based upon postsentencing rehabilitation. In Salinas-Cortez, the defendant pled guilty to possession with intent to distribute more than five kilograms of cocaine, as well as conspiracy to do so. At his initial sentencing hearing, the defendant requested a downward adjustment based upon his minimal or minor role in the offense. The probation office claimed in the Presentence Report that the defendant had more than a minimal or minor role in the offense. The sentencing court, at this first proceeding, adopted the PSR without specifically addressing the defendant’s request. The Third Circuit vacated this initial decision, ruling that the sentencing court erred when it failed to address the defendant’s colorable argument for a minor role adjustment. On remand, the defendant also requested a reduction based upon his postsentencing rehabilitation. The sentencing court again rejected the defendant’s request, reasoning that it did not have the authority to consider any other issue on remand except the previously-requested minor role adjustment. Approximately one week after the sentencing court’s decision on remand, the U.S. Supreme Court decided United States v. Pepper, 131 S.Ct. 1229 (2011). The High Court in Pepper addressed the issue of whether, after the original sentence has been set aside on appeal, a sentencing court may consider evidence of postsentencing rehabilitation to support a downward variance. The Court answered in the affirmative, reasoning that information regarding the defendant’s history and characteristics historically has been highly relevant to the sentencing process. The Third Circuit interpreted Pepper to conclude that the defendant’s postsentencing rehabilitation is an essential part of his history, and therefore relevant to determine his likelihood of recidivism. The court in Salinas-Cortez concluded that, while the appellate court retains the authority limit the scope of a sentencing hearing on remand, such limitation must be explicitly instructed. The court ultimately ruled that its decision to remand the defendant’s original sentence did not dictate that the sentencing court could consider only the defendant’s previously-requested minor role adjustment. Consequently, the Third Circuit remanded the sentencing once again to afford the sentencing court the opportunity to address the defendant’s request for a downward variance based upon postsentencing rehabilitation.

*Congratulations to Supervisory Assistant Federal Defender David L. McColgin on this mighty win “on the papers”! He will surely be missed here in the Eastern District of PA, as he has decided to take his “mojo” up north to Vermont.

Court finds PA Terroristic Threats Prior to be Crime of Violence

United States v. Mahone, 2011 WL 5153699 (Nov. 1, 2011).

Mahone pleaded guilty to being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1). Mahone objected to the base offense level in the PSR, calculated under U.S.S.G. § 2K2.1(a)(2) at 24 because he had "at least two felony convictions of either a crime of violence [ (COV) ] or a controlled substance offense." Mahone asserted that one of his priors, a 1994 Pennsylvania conviction for making terroristic threats in violation of 18 Pa. Cons.Stat. § 2706, did not qualify as a COV.

At the time Mahone incurred the prior conviction, the statute made it unlawful for a person to:

"threaten[ ] to commit any crime of violence with intent to terrorize another or to cause evacuation of a building, place of assembly, or facility of public transportation, or otherwise to cause serious public inconvenience, or in reckless disregard of the risk of causing such terror or inconvenience."

18 Pa. Cons.Stat. § 2706 (1972).

Application of the formal categorical approach showed the offense to be broader than the definition of COV under U.S.S.G. § 4B1.2(a)(1). However, § 2706 is phrased in the disjunctive, and the court applied the modified approach, outlining § 2706 to determine if there was a variation that could constitute a COV. (Since Mahone’s conviction, the PA legislature has rewritten the statute into three distinct subsections, because the Court found the statute has always been divisible into the three enumerated offenses, the analysis is the same).

The court next concluded that the subsection prohibiting a threat to commit a crime of violence with intent to terrorize another person, of which Mahone was convicted, may qualify. Next the Court re-employed the modified approach to determine whether the underlying state crime of violence could satisfy the requirements for a federal COV.

The charging document and colloquy in this case showed that the predicate PA "crime of violence" was "criminal homicide," a statutory provision states that prohibits "intentionally, knowingly, recklessly or negligently cause[ing] the death of another human being." Despite the fact that the PA crime of violence contained reckless and negligent mens reas which would not satisfy the federal COV standard, the Court concluded that the only variations of the criminal homicide statute that could serve as the predicate crime of violence for purposes of § 2706 is the act of intentionally or knowingly causing the death of another, because a person cannot threaten to terrorize another with a reckless act.

Continuing offense predating Guidelines harshening + continuing offense following Guidelines harshening + U.S.S.G. § 3D1.2 grouping + one book rule...

...equals no ex post facto prohibition on applying harsher Guidelines.

The Third Circuit decided United States v. Siddons, Case No. 10-1350, on October 3, 2011. Mr. Siddons raised four issues on appeal: (1) the district court’s denial of his request to withdraw his guilty plea; (2) the district court’s applying U.S.S.G. § 2B1.1(b)(16)(A) (2008) to increase his offense level by four; (3) the district court’s applying an obstruction of justice enhancement to increase his offense level by two; and (4) the district court’s varying above the Guidelines. The Third Circuit affirmed the district court on all four, and discussed only the second in significant detail. This post follows the Court's lead.

The text of § 2B1.1(b)(16)(A) (2008) was added to the Guidelines in 2003 (and currently resides at § 2B1.1(b)(17)(A)). It enhances a defendant’s offense level by four where the offense involved a violation of securities law and the defendant was, among other things, an investment advisor. Mr. Siddons had been an investment advisor when conduct relevant to his offense – but not the offense conduct itself –started, in 2002, but was no longer one by the time the Guideline went into effect in November, 2003. He argued that the district court erred in two ways when it applied the enhancement: First, by applying the Guideline when his offense conduct didn’t meet the prerequisites, and second, by applying the Guideline when doing so violated the ex post facto clause.

The Third Circuit rejected the first argument out of hand. It held that because his 2002 behavior as an investment advisor was relevant conduct to his offense pursuant to § 1B1.3, it was part of the calculation of his offense level under § 2B1.1. It then rejected the second after a more in-depth discussion of the combined effects of offense grouping under § 3D1.2, the “one book” rule, and the continuing nature of Mr. Siddons’s offenses:

We agree with those Courts of Appeals that have found no ex post facto violation when a court groups continuing, related conduct and applies the Guidelines Manual in effect during the latest-concluded conduct. This is so because the grouping provisions, combined with the one-book rule, place a defendant on notice that a court will sentence him or her under the Guidelines Manual in effect during the commission of his or her last offense in a series of continuous, related offenses . . . . Due to the grouping rules at § 3D1.2(d) and the one-book rule at § 1B1.11, Siddons was on constructive notice that the November 1, 2003 enhancement could apply to his entire scheme, should he continue the conduct after the date of enactment. As the Eighth Circuit aptly stated, “it was not the amendments to the Sentencing Guidelines that disadvantaged [Siddons], it was his election to continue his criminal activity [after the effective date of the enhancements]."

The Third Circuit's position thus is consistent with the views of the Second, Fifth, Sixth, Seventh, Eighth, Tenth, and Eleventh Circuits. So far, only the Ninth has taken a contrary view.

The Sentencing Enhancement Under 18 U.S.C. §3147 Authorizes Courts to Add Up to Ten Years to the Statutory Maximum.

Section 18 U.S.C. §3147(1) provides that if a person is convicted of an offense while under pretrial release, then in addition to the sentence for the underlying felony offense, the person should be sentenced to an additional term of up to 10 years. In United States v. Melvin Lewis, No. 10-4460 (3d Cir. October 18, 2011), the Third Circuit, in a case of first impression, held that §3147 has the effect of increasing the statutory maximum for an underlying offense by up to ten years, and that the sentences must be imposed consecutively.

Appellant Melvin Lewis was tried and convicted on two counts of a three count indictment. Specifically he was convicted of (1) being a felon in possession of ammunition, in violation of 18 U.S.C. §922(g)(1), and (2) committing an offense while on pretrial release, in violation of 18 U.S.C. § 3147(1). He was acquitted of a carjacking charge.

Mr. Lewis’s sentencing range was 140 to 175 months, and he was sentenced to 138 months, 96 for the ammunition offense and 42 months for violating §3147. He challenged the sentence arguing that the statutory maximum for §922(g)(1) was 120 months. The district court interpreted §3147 to authorize a combined sentence that exceeded the statutory maximum for the underlying offense. The Third Circuit agreed, finding that it was the “clear and unambiguous”intent of Congress to impose an extra sentence and that there was no exception to the statute that would prevent the extra time from exceeding the statutory maximum.

Nevertheless, the Third Circuit remanded the case because §3147 is a sentencing enhancement and not a separate crime. While the enhancement must be submitted to the jury, that finding is not a conviction. Therefore, it was plain error to convict Mr. Lewis for violating §3147, as if it were a separate offense.

Bribery Prosecution: Instruction that coercion may bear on intent not required, sentence remanded for failure to consider sentencing disparity

In U.S. v. Herman Friedman, No. 10-2235 (3d Cir., Sept. 28, 2011), the Third Circuit Court of Appeals affirmed Friedman’s conviction for bribery under 18 U.S.C. § 666(a)(2), but vacated and remanded for resentencing based on procedural unreasonableness.

Friedman owned a residential apartment building with 16 rented apartments, but after a routine inspection, a building inspector issued a Notice of Violation because only 15 units were legal. Although Friedman could apply for a variance, he faced a $500 per day penalty while his application was pending. So, Friedman arranged to pay a construction code official $5000 to overlook the violation. Unfortunately for Friedman, the code official, who had been caught taking bribes in an earlier investigation, was an FBI informant.

The Court rejected several defense arguments relating to the conviction; the most significant was an issue of first impression: whether the District Court abused its discretion in rejecting Friedman’s requested proposed jury instruction that coercion bears on the defendant’s state of mind.

Friedman’s proposed jury instruction would have charged the jury that coercion “may bear upon whether the defendant ever formed the intent required to commit the crime of bribery,” even when the defendant was not legally entitled to the act he was paying the official to perform. Friedman conceded that neither Supreme Court nor Third Circuit law (including the Third Circuit Model Jury Instructions) addressed this issue. But Friedman did cite for support the Second Circuit’s decision in United States v. Barash, 365 F.2d 395 (1966).

The Court found Barash inapposite because it found that coercion can bear on the intent required to commit bribery only in limited circumstances, where :“(1) the defendant is paying the official to perform an act to which he is legally entitled; and (2) the official threatens the defendant with ‘serious economic loss’ unless the bribe is paid.” Barash, 365 F.2d at 401-02. In contrast, Friedman’s proposed instruction did not limit the jury’s consideration of coercion to situations where the defendant was legally entitled to the act. The Court further noted that even if Friedman’s jury instruction were proper as a matter of law, the record provided no evidence of coercion.

In vacating and remanding Friedman’s 34-month sentence for resentencing, the Court noted , among other things, that the District Court had not considered explicitly the “unwarranted sentencing disparities” sentencing factor of 18 U.S.C. § 3553(a)(6). In his sentencing memorandum, Friedman noted the sentence of another person convicted of the exact same offense — involving the same $5000 bribe to the same code official — who received a sentence of three-years’ probation.

Summary by Ron Krauss

Money Laundering - Insufficient Knowledge of Intent to Conceal

United States v. Richardson, – F.3d –, 2011 WL 4430808 (3d Cir. Sept. 23, 2011). Asya Richardson was the fiancee of Alton Coles, the leader of a drug ring responsible for selling large amounts of cocaine and cocaine base in the Philadelphia area between 1998 and 2005. In the summer of 2005, the couple bought a home together. The government charged Richardson with money laundering, under 18 U.S.C. § 1956(a)(1)(B)(1), on the theory that she had participated in the purchase of the home knowing that drug money was being used and with intent to conceal that fact. The court found the evidence insufficient to support her conviction.

Although the government proved that Richardson lied about various aspects of the transaction in the mortgage materials, there was little evidence that she did so for any reason other than to hide the couple’s bad credit. There was also little evidence connecting her to Coles’s suspicious financial transactions related to the house (e.g., structuring deposits for the down payment). Thus, the government could not prove the element that Richardson knew the transaction was designed to conceal the nature, location, source, ownership or control of the proceeds of a specified unlawful activity. In considering Richardson’s various arguments, the Court held that “proceeds” of drug trafficking are gross receipts, not profits, weighing in on a question left open in Supreme Court’s decision in United States v. Santos, 553 U.S. 507 (2008).

Summary by Sarah Gannett

Honest Services Fraud and Bribery convictions upheld

In US v. Wayne R. Bryant and R. Michael Gallagher, Nos. 09-3243 & 09-3275 (click here) (Aug. 25, 2011), the Circuit affirmed the convictions of Bryant and Gallagher for honest services fraud and bribery in connection Gallagher, dean of a NJ medical school, giving Bryant, a state senator, a "low-show" job in exchange for Bryant funneling state money to the medical school. The Circuit rejected defense arguments that the government interfered with defense access to witnesses, that the evidence was insufficient, and that the jury instructions were defective.

Due Process/Interference with the Defense

The Court rejected a due process challenge to language that the government had placed on the face of every grand jury subpoena issued in the case, warning witnesses that “disclosure of the nature and existence of this subpoena could [and, in at least one case, “would”] obstruct and impede a criminal investigation . . . .” The defense contended that that language interfered with its access to witnesses by restricting the witnesses’ free choice whether to speak with the defense. Even though the warning language tracked the language of the obstruction of justice statute, and even though the U.S. Attorney implied a judicial imprimatur by placing the language on the face of the subpoenas, the Court characterized the language as a mere “request[] that witnesses practice discretion,” which “forthright citizens” would be inclined to heed. Thus it found no due process violation.

When defending its warning language in the district court, the U.S. Attorney’s Office for the District of New Jersey had cited an office policy of putting that language on every single grand jury subpoena. The Bryant Court criticized that blanket approach as “bad policy,” but preserved the prosecutors’ discretion to decide when to warn witnesses that they risk prosecution for obstruction if they speak with the defense.


Honest Services Fraud

The jury in Bryant was instructed solely on a bribery theory of honest services fraud, which survived the Supreme Court’s 2009 Skilling decision. Thus, the defense challenged the contours of the bribery theory, with respect to evidentiary insufficiency and instructional error.

In sum, the Court reaffirmed that honest services fraud bribery requires a quid pro quo exchange of a thing of value for an official act; that is, an intent to influence an official action (by the payor) and to be influenced (by the payee). It found the evidence plainly sufficient, and declined to adopt a more restrictive interpretation of bribery in light of Skilling. On the latter point, it rejected a defense challenge to the “stream of benefits” (or “retainer”) theory of bribery. The Court also endorsed, for the first time, an instruction that permits conviction in the presence of a “dual purpose” for the challenged payments. That is, a payor who makes a payment with the intent to influence official action is guilty even if he also intends to compensate the payee for legitimate work. The Court does not appear to have intended to use “dual purpose” to dilute the requirement of a quid pro quo, however. It referred to the secondary purpose as an “additional hope” of receiving legitimate work – in addition, that is, to the required corrupt intent to influence official action. Thus “dual purpose” will likely function in the future as another in a string of engraftments to the honest services fraud instruction that tell juries what is not a defense, rather than what the government must prove.
Section 666 Bribery

The Bryant Court declined to reach the most significant open issue in this circuit with respect to Section 666 bribery: does it require a quid pro quo exchange? Because the Court found that the jury instructions did require an exchange, it did not have to decide whether omitting an exchange was error.

The defense had contended that the jury instructions improperly substituted the mere temporal overlap of payment and official action for the required exchange, by using the phrase “while intending to influence [or to be influenced],” “while” being a temporal concept rather than a causal one. The Court held that the inclusion of the word “while” did not dilute the central concept of exchange that the intent language embodies.

Mail Fraud in Connection with Pension

The Court also addressed several arguments related to “traditional” mail fraud, in connection with counts alleging that Bryant had defrauded the New Jersey Board of Pensions and Benefits. Here the Court left open another significant issue: whether to join other circuits in rejecting the doctrine of mail fraud convergence. The doctrine requires proof that the defendant made a false statement to the actual victim. Finding that Bryant had in fact made a false statement directly the victim, the Court declined to decide whether convergence is required.

A practice note on this point: the government typically argues that the circuit already rejected mail fraud convergence in United States v. Olatunji, 872 F.2d 1161 (3d Cir. 1989), even though (as the defense contended in Bryant) any such ruling in Olatunji would have been dicta. Bryant makes clear that the circuit views the issue as open.