U.S. v. Allen, 2010 WL 3222107 (Aug 17, 2010) At approximately 8:00 p.m., police accompanied by a SWAT team executed a search warrant at a bar where Allen worked as a security guard. The warrant, issued in conjunction with a homicide investigation unrelated to Allen or the bar, authorized collection of security videotapes. The bar was in a high-crime area and was patronized by some with histories of violence, firearm possession, and drug activity. Roughly four months before the raid, a person had been shot at the bar, and a few weeks before the raid an individual was arrested for illegally possessing a firearm inside the bar.
Officers secured the premises inside and outside the bar. Five people-including Allen, who was on duty as a security guard-were standing directly in front of the bar. The SWAT team, wearing armor and with guns drawn, ordered them to lie face down on the sidewalk with their hands in front of them, and explained that they would be detained just long enough to ensure the officers' safety and for the officers to gather the evidence they were seeking. The district court found that Allen, while lying on the ground, volunteered he had a firearm upon observing police take a gun from an individual lying next to him. An officer then searched Allen, seized the gun, and inquired if he had a permit for it. Allen responded that he had an expired, out-of-state permit. Allen was arrested.
In denying Allen’s motion to suppress, the district court concluded that pursuant to Michigan v. Summers, 452 U.S. 692 (1981) (upholding detention of resident during execution of warrant to search house for contraband), and Los Angeles County v. Rettele, 550 U.S. 609 (2007) (approving detention of occupants of home during execution of warrant to search residence and other persons believed to live there for evidence), the search warrant carried with it a limited authorization to secure persons at the bar and that the officers’ actions were reasonable to ensure their safety.
The Third Circuit affirmed. The Court first found Summers distinguishable, because there police had a warrant to search the arrestee’s home for contraband, and thus some basis to suspect the arrestee of potential criminal activity. The arrestee’s detention served to prevent flight, minimize risk of harm from the person who may own the contraband being sought, and assist in orderly completion of the search - of which only minimizing the risk of harm was applicable here. However, relying on Rettele, the Court held that safety concerns alone may be sufficient to detain individuals during execution of a warrant, regardless of whether the search warrant was for evidence (as in Rettele) or contraband (as in Summers). That was the case here, the Court concluded, as police were executing a valid search warrant for evidence at a bar located in a high-crime area, where patrons were known to carry firearms, and where several firearm-related crimes had recently been committed.
The Court distinguished its own precedent in Leveto v. Lapina, 258 F.3d 156 (3d Cir. 2001), in which plaintiffs’ detention during a search was held to violate the Fourth Amendment, finding the detention there far more intrusive. It also noted that, at least with respect to language in Leveto distinguishing between searches for contraband and searches for evidence, Retelle supersedes Leveto and renders that distinction immaterial.
Friday, August 27, 2010
Tuesday, August 17, 2010
In first treatment of Gant, Third Circuit applies limited search-incident-to-arrest rule beyond vehicle searches
In its first treatment of Arizona v. Gant, 129 S. Ct. 1710 (2009), which overruled the Belton rule allowing police to search a suspect's car incident to his arrest even if the suspect no longer has access to the car at the time of the search, the Third Circuit has held that Gant applies to all searches incident to arrest, not just to car searches. The case is United States v. Shakir, No. 09-2665 (3d Cir. Aug. 10, 2010).
The search-incident-to-arrest exception to the warrant requirement permits police to search an arrestee's person and "grab area," to ensure officer safety and guard against evidence destruction. Fueled by Belton, many courts had expanded the exception to permit search of the arrest area even after the suspect no longer conceivably has access to that area (e.g., when he had already been transported from the scene)-- unmooring the exception from its rationale.
Gant put an end to that, but like Belton, was decided in the vehicle context. The Third Cicuit has now made clear that the newly limited search-incident-to-arrest rule applies in all contexts: police may search only the area reasonably accessible to the arrestee at the time of the search.
In Shakir, the arrestee was handcuffed and guarded by two police officers in a crowded hotel lobby. When arrested, a duffel bag he was carrying dropped to his feet. Applying the Gant standard, the Court held that a search of the bag was permissible because -- although Mr. Shakir was guarded and handcuffed -- the bag remained within his reach in a chaotic public venue.
As the result in Shakir suggests, the Gant standard will be broadly, but perhaps not rigorously, applied. As the Court put it: "th[e] standard requires something more than the mere theoretical possibility that a suspect might access a weapon or evidence, [but] it remains a lenient standard."
The search-incident-to-arrest exception to the warrant requirement permits police to search an arrestee's person and "grab area," to ensure officer safety and guard against evidence destruction. Fueled by Belton, many courts had expanded the exception to permit search of the arrest area even after the suspect no longer conceivably has access to that area (e.g., when he had already been transported from the scene)-- unmooring the exception from its rationale.
Gant put an end to that, but like Belton, was decided in the vehicle context. The Third Cicuit has now made clear that the newly limited search-incident-to-arrest rule applies in all contexts: police may search only the area reasonably accessible to the arrestee at the time of the search.
In Shakir, the arrestee was handcuffed and guarded by two police officers in a crowded hotel lobby. When arrested, a duffel bag he was carrying dropped to his feet. Applying the Gant standard, the Court held that a search of the bag was permissible because -- although Mr. Shakir was guarded and handcuffed -- the bag remained within his reach in a chaotic public venue.
As the result in Shakir suggests, the Gant standard will be broadly, but perhaps not rigorously, applied. As the Court put it: "th[e] standard requires something more than the mere theoretical possibility that a suspect might access a weapon or evidence, [but] it remains a lenient standard."
Tuesday, August 10, 2010
Fractured Third Circuit panel clarifies government waiver rules and previews looming Fourth Amendment issue
In a rare, three-opinion panel decision, the Third Circuit has weighed in on -- but, for now, has not resolved -- an important issue concerning the Fourth Amendment exclusionary rule: when a suspect is unlawfully seized, but then breaks away and discards evidence while being chased by police, should the evidence be suppressed? The case is United States v. Dupree, No. 09-3391 (3d Cir. Aug. 6, 2010). The district court suppressed the evidence in question, a gun, and the government appealed. The Third Circuit affirmed the suppression order, with one judge concluding that the government had waived the suppression argument it made on appeal, and another judge concluding that the order should be affirmed on the merits.
A standard exclusionary rule "fruits" analysis would lead to suppression when a "forced abandonment" occurs after an unlawful seizure, since there is no meaningful causal attenuation between the unlawful seizure and the discovery of the discarded evidence. The Third Circuit assumed as much in United States v. Coggins, 986 F.2d 651 (3d Cir. 1993), which presented the same factual scenario. The Coggins court did not have to reach the fruits issue, however, because the Court in that case held that the initial seizure was lawful.
But in Dupree, everyone agreed -- the government a bit later, as explained below -- that there was an unlawful seizure. The fruits issue was thus in play.
In dictum in California v. Hodari D., 499 U.S. 621 (1991), the Supreme Court arguably cast doubt on whether suppression is appropriate in this situation. Hodari D.'s holding is that a show of authority to which a suspect does not submit is not a seizure -- regardless of whether a reasonable person in the suspect's position would have thought he was free to leave. Since there was no seizure in Hodari D. (just as there was no unlawful seizure in Coggins), the Supreme Court had no occasion to conduct a fruits analysis. But the Court stated at one point in its opinion that, had the suspect in Hodari D. been touched by the police and thereafter had broken away and discarded evidence, "it would hardly be realistic to say that disclosure had been made during the course of the arrest." 499 U.S. at 625.
On appeal in Dupree, the government argued that this dictum from Hodari D. -- coupled with the deterrence rationale for the exclusionary rule recently emphasized by the Supreme Court in cases such as Hudson v. Michigan, 547 U.S. 586 (2006) and Herring v. United States, 129 S. Ct. 695 (2009) -- means that evidence discarded after a brief seizure has ended is not fruit of the seizure, and suppression is therefore inappropriate. But in the district court, the government had argued a different point: that, under Hodari D., Dupree had never been seized before discarding the evidence. It was only on appeal that the government conceded that an unlawful seizure -- however momentary -- had taken place (without reasonable suspicion, a police officer had grabbed Dupree for approximately two seconds before Dupree broke away and fled).
Most of the courts that have addressed the dictum from Hodari D. have held that it does not mean that such evidence is admissible -- instead, they adhere to a standard fruits analysis and suppress the evidence. See, e.g., United States v. Wilson, 953 F.2d 116, 127 (4th Cir. 1991).
Two of the three judges on the Dupree panel were ready to engage the fruits issue on the merits. Judge Fisher would have affirmed suppression of the evidence under a standard fruits analysis, concluding that the government's Hodari D. argument rests on dictum that has rarely been read in accordance with the government's interpretation, and is in "manifest tension" with established fruits law. Judge Cowen, on the other hand, favored the government's reading of the Hodari D. dictum and would have applied it to reverse the suppression order.
Judge Hardiman, the third judge on the panel, declined to address the merits because he concluded that the government waived its fruits argument by not raising it in the district court. Judge Hardiman emphasized that, as an appellant, the government is subject to strict waiver principles no less than are defendants. Simply relying on Hodari D. in the district court was not enough to preserve the government's fruits argument, because Hodari D. had been used below not to argue fruits, but to argue no seizure.
Dupree is a precedential decision, but what law does it announce beyond affirming the suppression order in the case? The decision's impact appears to lie in its "institutional value," a criterion the Third Circuit uses to determine what decisions receive precedential status. Waiver law has developed for the most part with defendants as appellants, so clarifying waiver's impact on the government is crucial. But perhaps even more, the important Fourth Amendment issue raised in this case is bound to arise again -- in this circuit and others -- and the thoughtful analyses of its merits is surely valuable in that context.
A standard exclusionary rule "fruits" analysis would lead to suppression when a "forced abandonment" occurs after an unlawful seizure, since there is no meaningful causal attenuation between the unlawful seizure and the discovery of the discarded evidence. The Third Circuit assumed as much in United States v. Coggins, 986 F.2d 651 (3d Cir. 1993), which presented the same factual scenario. The Coggins court did not have to reach the fruits issue, however, because the Court in that case held that the initial seizure was lawful.
But in Dupree, everyone agreed -- the government a bit later, as explained below -- that there was an unlawful seizure. The fruits issue was thus in play.
In dictum in California v. Hodari D., 499 U.S. 621 (1991), the Supreme Court arguably cast doubt on whether suppression is appropriate in this situation. Hodari D.'s holding is that a show of authority to which a suspect does not submit is not a seizure -- regardless of whether a reasonable person in the suspect's position would have thought he was free to leave. Since there was no seizure in Hodari D. (just as there was no unlawful seizure in Coggins), the Supreme Court had no occasion to conduct a fruits analysis. But the Court stated at one point in its opinion that, had the suspect in Hodari D. been touched by the police and thereafter had broken away and discarded evidence, "it would hardly be realistic to say that disclosure had been made during the course of the arrest." 499 U.S. at 625.
On appeal in Dupree, the government argued that this dictum from Hodari D. -- coupled with the deterrence rationale for the exclusionary rule recently emphasized by the Supreme Court in cases such as Hudson v. Michigan, 547 U.S. 586 (2006) and Herring v. United States, 129 S. Ct. 695 (2009) -- means that evidence discarded after a brief seizure has ended is not fruit of the seizure, and suppression is therefore inappropriate. But in the district court, the government had argued a different point: that, under Hodari D., Dupree had never been seized before discarding the evidence. It was only on appeal that the government conceded that an unlawful seizure -- however momentary -- had taken place (without reasonable suspicion, a police officer had grabbed Dupree for approximately two seconds before Dupree broke away and fled).
Most of the courts that have addressed the dictum from Hodari D. have held that it does not mean that such evidence is admissible -- instead, they adhere to a standard fruits analysis and suppress the evidence. See, e.g., United States v. Wilson, 953 F.2d 116, 127 (4th Cir. 1991).
Two of the three judges on the Dupree panel were ready to engage the fruits issue on the merits. Judge Fisher would have affirmed suppression of the evidence under a standard fruits analysis, concluding that the government's Hodari D. argument rests on dictum that has rarely been read in accordance with the government's interpretation, and is in "manifest tension" with established fruits law. Judge Cowen, on the other hand, favored the government's reading of the Hodari D. dictum and would have applied it to reverse the suppression order.
Judge Hardiman, the third judge on the panel, declined to address the merits because he concluded that the government waived its fruits argument by not raising it in the district court. Judge Hardiman emphasized that, as an appellant, the government is subject to strict waiver principles no less than are defendants. Simply relying on Hodari D. in the district court was not enough to preserve the government's fruits argument, because Hodari D. had been used below not to argue fruits, but to argue no seizure.
Dupree is a precedential decision, but what law does it announce beyond affirming the suppression order in the case? The decision's impact appears to lie in its "institutional value," a criterion the Third Circuit uses to determine what decisions receive precedential status. Waiver law has developed for the most part with defendants as appellants, so clarifying waiver's impact on the government is crucial. But perhaps even more, the important Fourth Amendment issue raised in this case is bound to arise again -- in this circuit and others -- and the thoughtful analyses of its merits is surely valuable in that context.
Thursday, July 29, 2010
Upholding § 922(k) Ban on Unmarked Firearms, Court Charts Course for Second Amendment Challenges
In a ruling upholding 18 U.S.C. § 922(k), which bars possession of firearms with obliterated serial numbers, the Court sets forth an extensive gloss on the proper approach to Second Amendment challenges under the Supreme Court’s path-breaking decision in District of Columbia v. Heller, 128 S. Ct. 2783 (2008). Heller concluded that the Second Amendment confers an individual right to keep and bear arms, at least “for the core purpose of allowing law-abiding citizens to ‘use arms in defense of hearth and home.’” Elaborating on that ruling, today’s decision in United States v. Michael Marzzarella, Third Circuit No. 09-3185, is clearly at pains not to open any Pandora’s box. Defendants charged with gun offenses may perhaps find instead a mixed bag.
On the one hand, dicta in the new decision further entrenches a proposition as to which Heller likewise urged it would not “cast doubt”: the Second Amendment “affords no protection,” the Circuit says, “for the possession of dangerous and unusual weapons, possession by felons and the mentally ill, and the carrying of weapons in certain sensitive places.” The decision also finds several routes to upholding § 922(k), even as applied to possession exclusively within the home.
On the other hand, the Court reasons that the statute’s constitutionality should be reviewed under a standard of “intermediate scrutiny,” which is to be informed by reference to First Amendment jurisprudence addressing laws burdening protected expression. The Court further suggests that at least some gun laws may be subject to strict scrutiny. Under even intermediate scrutiny, the purpose served by a regulation burdening a protected Second Amendment interest must not be more than “reasonably necessary.”
Michael Marzzarella was charged under § 922(k) with possession of a firearm with an obliterated serial number. He moved to dismiss the indictment under the Second Amendment, lost, and entered a conditional guilty plea reserving the right to appeal the constitutional question. Affirming the motion’s denial, the Court, with Judge Scirica writing, offers an exegesis of Heller. It finds that decision to suggest a two-step approach to Second Amendment challenges, whereby a court must first ask whether a law imposes a burden on conduct falling within the scope of the Amendment’s guarantee. If it does, the court must next determine whether the law survives the appropriate “form of means-end scrutiny” – that is, rational basis review, intermediate scrutiny, or strict scrutiny.
Elaborating on the first step in this two-step approach, the Court reiterates Heller’s dictate that the Second Amendment “affords no protection to weapons not typically possessed by law-abiding citizens for lawful purposes.” By contrast, “commercial regulations on the sale of firearms do not fall outside the scope of the Second Amendment,” and will thus warrant review of “the nature and extent of the imposed condition.”
Turning to § 922(k), the Court “cannot be certain that the possession of unmarked firearms in the home is excluded from the right to bear arms.” It then concludes that § 922(k) withstands either intermediate or strict scrutiny, although it favors the less demanding of the two: “While it is not free from doubt, we think … § 922(k) should be evaluated under intermediate scrutiny.” Whichever standard applies, the decisive fact is that banning the possession of unmarked firearms “restricts possession only of weapons which have been made less susceptible to tracing,” and not of “any otherwise lawful firearm.” Unable to “conceive of a lawful purpose for which a person would prefer an unmarked firearm,” the Court finds that “the burden will almost always fall only on those intending to engage in illicit behavior.” Accordingly, any intrusion upon a protected Second Amendment interest is trumped by the “law enforcement interest in enabling the tracing of weapons via their serial numbers.” By “enabling law enforcement to gather vital information from recovered firearms,” § 922(k) serves “not only a substantial but a compelling interest.”
On the one hand, dicta in the new decision further entrenches a proposition as to which Heller likewise urged it would not “cast doubt”: the Second Amendment “affords no protection,” the Circuit says, “for the possession of dangerous and unusual weapons, possession by felons and the mentally ill, and the carrying of weapons in certain sensitive places.” The decision also finds several routes to upholding § 922(k), even as applied to possession exclusively within the home.
On the other hand, the Court reasons that the statute’s constitutionality should be reviewed under a standard of “intermediate scrutiny,” which is to be informed by reference to First Amendment jurisprudence addressing laws burdening protected expression. The Court further suggests that at least some gun laws may be subject to strict scrutiny. Under even intermediate scrutiny, the purpose served by a regulation burdening a protected Second Amendment interest must not be more than “reasonably necessary.”
Michael Marzzarella was charged under § 922(k) with possession of a firearm with an obliterated serial number. He moved to dismiss the indictment under the Second Amendment, lost, and entered a conditional guilty plea reserving the right to appeal the constitutional question. Affirming the motion’s denial, the Court, with Judge Scirica writing, offers an exegesis of Heller. It finds that decision to suggest a two-step approach to Second Amendment challenges, whereby a court must first ask whether a law imposes a burden on conduct falling within the scope of the Amendment’s guarantee. If it does, the court must next determine whether the law survives the appropriate “form of means-end scrutiny” – that is, rational basis review, intermediate scrutiny, or strict scrutiny.
Elaborating on the first step in this two-step approach, the Court reiterates Heller’s dictate that the Second Amendment “affords no protection to weapons not typically possessed by law-abiding citizens for lawful purposes.” By contrast, “commercial regulations on the sale of firearms do not fall outside the scope of the Second Amendment,” and will thus warrant review of “the nature and extent of the imposed condition.”
Turning to § 922(k), the Court “cannot be certain that the possession of unmarked firearms in the home is excluded from the right to bear arms.” It then concludes that § 922(k) withstands either intermediate or strict scrutiny, although it favors the less demanding of the two: “While it is not free from doubt, we think … § 922(k) should be evaluated under intermediate scrutiny.” Whichever standard applies, the decisive fact is that banning the possession of unmarked firearms “restricts possession only of weapons which have been made less susceptible to tracing,” and not of “any otherwise lawful firearm.” Unable to “conceive of a lawful purpose for which a person would prefer an unmarked firearm,” the Court finds that “the burden will almost always fall only on those intending to engage in illicit behavior.” Accordingly, any intrusion upon a protected Second Amendment interest is trumped by the “law enforcement interest in enabling the tracing of weapons via their serial numbers.” By “enabling law enforcement to gather vital information from recovered firearms,” § 922(k) serves “not only a substantial but a compelling interest.”
Court Construes Meaning of Federal “Official” for Purposes of Threat Statute; Rejects Self-Representation Challenge
In United States v. Michael Bankoff, Nos. 08-3275 & 08-3688 (July 27, 2010), the Court holds that the federal statute criminalizing certain threats of federal “officials” extends to both “officers and employees.” Separately, the Court determines that there was no abuse of discretion in a district court ruling temporarily barring the defendant from representing himself.
Section 115 of Title 18, enacted in 1984, defines certain crimes relating to threats of a federal “official” “whose killing would be a crime under” 18 U.S.C. § 1114. Section 1114 in turn covers “any officer or employee of the United States.…” Michael Bankoff argued that § 115’s use of the term “official” limited that statute’s scope to “officers” within the meaning of § 1114, thus excluding “employees.” The district court agreed and instructed the jury that each of three Social Security Administration employees allegedly threatened by the defendant had to be “authorized to exercise his or her discretion in the performance of … duties,” rather than engaged in “routine and subordinate functions.” The jury returned a guilty verdict with respect to an SSA “claims representative” and, separately, an “operations supervisor.” The district court thereafter granted the defendant’s Rule 29 motion for acquittal as to the claims representative but upheld the verdict as to the operations supervisor. Both the defendant and the government appealed.
The Court, with Judge Ambro writing, holds for the government. Its analysis foregrounds the rule that “the meaning of statutory language, plain or not, depends on context.” Reviewing the cross-referenced § 1114 as it read at the time of § 115’s enactment, as well as other statutes defining federal “officials” for purposes of coverage under criminal statutes, the Court determines that “Congress intended terms like ‘official’ and ‘officer’ to have a special meaning in § 115 that was not the same as their ordinary, dictionary definitions.” Although Webster’s Third New International Dictionary, as published in 1971, defines an “official” as “a person authorized to act for a government, corporation, or organization,” and an “employee” as “one employed by another, usually in a position below the executive level and usually for wages,” the Court holds that “official” in § 115 encompasses “both officers and employees.” Indeed, it deems that statutory meaning “plain” and consults legislative history only as a consistent “course marker.” Accordingly, the Court not only rejects the defendant’s appeal but vacates the partial judgment of acquittal as to the claims representative, remanding for further consideration of alternative challenges to the sufficiency of the evidence on that count.
As to the right of self-representation, the Court finds no abuse of discretion in the district court’s ruling denying the defendant’s requests to give his opening statement and to cross-examine the government’s first witness. The defendant aired an “angry outburst” during the prosecutor’s opening and then demanded, upon its conclusion, to deliver his own opening pro se. In light of earlier vacillation by the defendant as to whether or not he would proceed with counsel, the Circuit holds that the request could be deemed equivocal, and a hearing on it properly deferred until the conclusion of the first day of trial. After defense counsel concluded cross-examination of the first witness, the district court permitted Bankoff to proceed pro se, and also ultimately allowed him to recall the first witness for a pro se cross. Meanwhile, the court permitted newly stand-by counsel to take over the questioning of a different witness when the defendant’s examination faltered. “In this context, we believe the Court not only acted well within its discretion, but treated Bankoff with the utmost fairness.”
Section 115 of Title 18, enacted in 1984, defines certain crimes relating to threats of a federal “official” “whose killing would be a crime under” 18 U.S.C. § 1114. Section 1114 in turn covers “any officer or employee of the United States.…” Michael Bankoff argued that § 115’s use of the term “official” limited that statute’s scope to “officers” within the meaning of § 1114, thus excluding “employees.” The district court agreed and instructed the jury that each of three Social Security Administration employees allegedly threatened by the defendant had to be “authorized to exercise his or her discretion in the performance of … duties,” rather than engaged in “routine and subordinate functions.” The jury returned a guilty verdict with respect to an SSA “claims representative” and, separately, an “operations supervisor.” The district court thereafter granted the defendant’s Rule 29 motion for acquittal as to the claims representative but upheld the verdict as to the operations supervisor. Both the defendant and the government appealed.
The Court, with Judge Ambro writing, holds for the government. Its analysis foregrounds the rule that “the meaning of statutory language, plain or not, depends on context.” Reviewing the cross-referenced § 1114 as it read at the time of § 115’s enactment, as well as other statutes defining federal “officials” for purposes of coverage under criminal statutes, the Court determines that “Congress intended terms like ‘official’ and ‘officer’ to have a special meaning in § 115 that was not the same as their ordinary, dictionary definitions.” Although Webster’s Third New International Dictionary, as published in 1971, defines an “official” as “a person authorized to act for a government, corporation, or organization,” and an “employee” as “one employed by another, usually in a position below the executive level and usually for wages,” the Court holds that “official” in § 115 encompasses “both officers and employees.” Indeed, it deems that statutory meaning “plain” and consults legislative history only as a consistent “course marker.” Accordingly, the Court not only rejects the defendant’s appeal but vacates the partial judgment of acquittal as to the claims representative, remanding for further consideration of alternative challenges to the sufficiency of the evidence on that count.
As to the right of self-representation, the Court finds no abuse of discretion in the district court’s ruling denying the defendant’s requests to give his opening statement and to cross-examine the government’s first witness. The defendant aired an “angry outburst” during the prosecutor’s opening and then demanded, upon its conclusion, to deliver his own opening pro se. In light of earlier vacillation by the defendant as to whether or not he would proceed with counsel, the Circuit holds that the request could be deemed equivocal, and a hearing on it properly deferred until the conclusion of the first day of trial. After defense counsel concluded cross-examination of the first witness, the district court permitted Bankoff to proceed pro se, and also ultimately allowed him to recall the first witness for a pro se cross. Meanwhile, the court permitted newly stand-by counsel to take over the questioning of a different witness when the defendant’s examination faltered. “In this context, we believe the Court not only acted well within its discretion, but treated Bankoff with the utmost fairness.”
"Career Offender" Designation Not Always Fatal to Sentence Reduction Motion Pursuant to Crack Cocaine Guideline Amendments
After an extended engagement with some very fine print, the Court holds in United States v. Glenn Flemming, No. 09-2726 (July 27, 2010), that a notable group of defendants are eligible for sentence reductions pursuant to the Sentencing Commission’s retroactive lowering of crack cocaine offense levels. These are all who were designated as career offenders under pre-2003 versions of the Sentencing Guidelines but who, following a determination that the career offender enhancement overstated their actual criminal history, received downward departures to points within a sentencing range yielded by the crack cocaine guideline. The Court also strongly suggests, without deciding, that the opposite result will hold for defendants sentenced under later versions of the Guidelines.
Glenn Flemming’s crack cocaine offenses were determined to have involved a quantity of between four and five grams. The offense conduct occurred during a period that called for application of the 2001 version of the Guidelines. Under the provision then codified at U.S.S.G. § 2D1.1, his sentencing range was 92-115 months. Two previous drug convictions, however, triggered the career offender provision at § 4B1.1 and raised his sentencing range to 267-327 months. The district court ultimately deemed this enhancement to overstate his criminal history, and therefore granted a downward departure for overrepresentation pursuant to § 4A1.3. In determining how far to depart, the court chose to reset the offense level as per § 2D1.1 itself. (Note that such a "vertical" § 4A1.3 departure, previously authorized under United States v. Shoupe, 35 F.3d 835 (3d Cir. 1994), is no longer permitted following a 2003 Guidelines amendment defining "departure" for purposes of § 4A1.3.) The court also reset Flemming’s criminal history category. The corresponding sentencing range thus reverted to 92-115 months, as provided by the crack cocaine guideline at § 2D1.1. The court imposed a high-end sentence of 115 months.
In 2008, the Commission designated as retroactive an amendment of the crack cocaine guideline lowering most defendants’ offense levels by two levels. Under the amended guideline, Flemming’s range becomes 77-96 months. He brought a pro se motion pursuant to 18 U.S.C. § 3582(c)(2), which permits district courts to reduce a sentence under an otherwise final judgment when the defendant was "sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered," if "such a reduction is consistent with applicable policy statements issued by the Sentencing Commission." The Commission, in turn, has promulgated a policy statement at § 1B1.10 barring reductions if a retroactive amendment "does not have the effect of lowering the defendant’s applicable guideline range." In Dillon v. United States, decided last month, the Supreme Court held this policy statement to remain binding on courts despite the generally advisory nature of the Guidelines after United States v. Booker.
Other circuits have lined up in a 3-3 split as to whether defendants in Flemming’s position are eligible for a sentence reduction under the amended crack guideline. In this week’s decision, the Third Circuit places itself in a new majority holding they are. The Court, with Judge Ambro writing, first determines that Flemming’s sentence was "based on a sentencing range that has subsequently been lowered." It devotes the better part of its discussion to scrutiny of the meaning of "applicable guideline range" as used in the Commission’s binding policy statement. Ultimately the Court concludes that neither the text of the pre-2003 Guidelines nor the Commission’s commentary permits a clear conclusion. Those Guidelines were "ambiguous as to whether the ‘applicable guideline range’ is [the defendant’s] pre-§ 4A1.3 departure range (the Career Offender Guidelines range) or his post-§ 4A1.3 departure range (the Crack Cocaine Guidelines range)."
Accordingly, the Court applies the rule of lenity to conclude that defendants such as Flemming are eligible for a reduction of sentence pursuant to the retroactive crack amendment. In a concluding discussion, the Court strongly suggests the opposite will be true of defendants sentenced under the Guidelines in effect as of October 27, 2003, or later. An amendment effective that date may be read to cure the ambiguity in the phrase "applicable Guidelines range" to provide that it means the range yielded by the career offender provision. If that reading is adopted, the policy statement at § 1B1.10 will bar sentence reductions even when district courts departed downward under § 4A1.3 and then selected sentences within the range yielded by the crack cocaine guideline. (The Circuit has previously held that defendants sentenced within the career offender range following conviction for crack cocaine offenses are not eligible for § 3582 reductions. See United States v. Mateo, 560 F.3d 152 (3d Cir. 2009) (Third Circuit Blog post here)).
Glenn Flemming’s crack cocaine offenses were determined to have involved a quantity of between four and five grams. The offense conduct occurred during a period that called for application of the 2001 version of the Guidelines. Under the provision then codified at U.S.S.G. § 2D1.1, his sentencing range was 92-115 months. Two previous drug convictions, however, triggered the career offender provision at § 4B1.1 and raised his sentencing range to 267-327 months. The district court ultimately deemed this enhancement to overstate his criminal history, and therefore granted a downward departure for overrepresentation pursuant to § 4A1.3. In determining how far to depart, the court chose to reset the offense level as per § 2D1.1 itself. (Note that such a "vertical" § 4A1.3 departure, previously authorized under United States v. Shoupe, 35 F.3d 835 (3d Cir. 1994), is no longer permitted following a 2003 Guidelines amendment defining "departure" for purposes of § 4A1.3.) The court also reset Flemming’s criminal history category. The corresponding sentencing range thus reverted to 92-115 months, as provided by the crack cocaine guideline at § 2D1.1. The court imposed a high-end sentence of 115 months.
In 2008, the Commission designated as retroactive an amendment of the crack cocaine guideline lowering most defendants’ offense levels by two levels. Under the amended guideline, Flemming’s range becomes 77-96 months. He brought a pro se motion pursuant to 18 U.S.C. § 3582(c)(2), which permits district courts to reduce a sentence under an otherwise final judgment when the defendant was "sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered," if "such a reduction is consistent with applicable policy statements issued by the Sentencing Commission." The Commission, in turn, has promulgated a policy statement at § 1B1.10 barring reductions if a retroactive amendment "does not have the effect of lowering the defendant’s applicable guideline range." In Dillon v. United States, decided last month, the Supreme Court held this policy statement to remain binding on courts despite the generally advisory nature of the Guidelines after United States v. Booker.
Other circuits have lined up in a 3-3 split as to whether defendants in Flemming’s position are eligible for a sentence reduction under the amended crack guideline. In this week’s decision, the Third Circuit places itself in a new majority holding they are. The Court, with Judge Ambro writing, first determines that Flemming’s sentence was "based on a sentencing range that has subsequently been lowered." It devotes the better part of its discussion to scrutiny of the meaning of "applicable guideline range" as used in the Commission’s binding policy statement. Ultimately the Court concludes that neither the text of the pre-2003 Guidelines nor the Commission’s commentary permits a clear conclusion. Those Guidelines were "ambiguous as to whether the ‘applicable guideline range’ is [the defendant’s] pre-§ 4A1.3 departure range (the Career Offender Guidelines range) or his post-§ 4A1.3 departure range (the Crack Cocaine Guidelines range)."
Accordingly, the Court applies the rule of lenity to conclude that defendants such as Flemming are eligible for a reduction of sentence pursuant to the retroactive crack amendment. In a concluding discussion, the Court strongly suggests the opposite will be true of defendants sentenced under the Guidelines in effect as of October 27, 2003, or later. An amendment effective that date may be read to cure the ambiguity in the phrase "applicable Guidelines range" to provide that it means the range yielded by the career offender provision. If that reading is adopted, the policy statement at § 1B1.10 will bar sentence reductions even when district courts departed downward under § 4A1.3 and then selected sentences within the range yielded by the crack cocaine guideline. (The Circuit has previously held that defendants sentenced within the career offender range following conviction for crack cocaine offenses are not eligible for § 3582 reductions. See United States v. Mateo, 560 F.3d 152 (3d Cir. 2009) (Third Circuit Blog post here)).
Monday, July 12, 2010
Defendant's Repeated Presence at Drug Transactions Coupled With Phone Calls Sufficient to Support Aiding and Abetting Conviction
In United States v. Mercado, No. 09-2681 (3d Cir., July 7, 2010), the three defendants were indicted for aiding and abetting the possession of more than 100 grams of heroin with the intent to distribute within 1000 feet of a school as well as the substantive counts. The only evidence presented regarding Defendant Mercado’s participation in the charged offenses was testimony from Co-defendant Rodriguez-Nunez that he observed Mercardo in the passenger seats of the vehicles driven by Co-defendant Morrisette when Rodriguez-Nunez and Morrisette met to conduct the drug exchanges. Specifically, Rodriguez-Nunez testified that he received drugs through the passenger-side window, where Mercado was seated as the passenger. Evidence was also presented that Morrisette called Mercado during the same time period in which he had received and returned calls from Rodriguez-Nunez. Rodriguez-Nunez admitted that he did not deal directly with Mercado, but only with Morrisette. The court noted that this was a “close case,” but that it was “constrained by a deferential burden” to conclude that a reasonable jury could have found that Mercado’s presence with Morrisette on multiple occasions during drug transactions with Rodriguez-Nunez was sufficient to support its verdict that Mercado, “at a minimum” encouraged the illegal drug activity between Rodriguez-Nunez and Morrisette. The Court ultimately affirmed the district court’s rejection of Mercado’s motion for judgment of acquittal, concluding that “a defendant's presence on multiple occasions during critical moments of drug transactions may, when considered in light of the totality of the circumstances, support an inference of the defendant's participation in the criminal activity.”
Tuesday, June 29, 2010
Conviction vacated due to prosecutorial misconduct
In United States v. Liburd, No. 09-3156 (D.VI 06/09/10), the Court of Appeals vacated Mr. Liburd’s conviction in light of repeated prosecutorial misconduct.
Mr. Liburd was in the St. Thomas airport intending to catch a flight to Atlanta. En route to his plane he passed through TSA security and one of the officers noticed on the scanner an image of two large organic masses located within his carry-on bag. He was therefore referred to an inspection station. While there, another TSA officer searched through his bag and asked about the two brick-like objects - Mr. Liburd told the officer that the bricks were “cheese.” Mr. Liburd was subsequently permitted to continue on to his flight. Then, while waiting for his flight, yet another TSA officer approached Mr. Liburd for a “random inspection” because he appeared to be nervous. Upon second search of his carry-on bag, Liburd made a statement that “there’s something in my bag” - the search revealed that the two brick-like objects were over 2 kilograms of cocaine.
Mr. Liburd was subsequently charged with possession with intent to distribute more than 500 grams of cocaine and attempted importation. Liburd moved to suppress the statement “there’s something in my bag” and the cocaine. Defense counsel did not move to suppress the cheese statement because, at that time, the statement had not been disclosed. At the suppression hearing, the district court asked the prosecutor if he intended to use Mr. Liburd’s statement at trial and the prosecutor stated, unequivocally, “No - that he wouldn’t rely on any statements” made by Mr. Liburd. As a result, the district court declined to rule on the admissibility of the statements.
On the eve of trial, the prosecutor disclosed Mr. Liburd’s cheese statement. And then, at trial, the prosecutor repeatedly admitted Mr. Liburd’s cheese statements. Defense counsel objected and ultimately requested a mistrial. The court declined the request for a mistrial but instead gave a curative instruction advising the jurors not to consider statements attributed to the defendant that were improperly introduced. Liburd was convicted and subsequently appealed.
On appeal, Liburd’s primary argument was that the prosecutor’s use of his cheese statement was misconduct, the misconduct violated his right to due process and the district court erred by refusing to grant a mistrial.
The Third Circuit Court of Appeals agreed - it determined that the prosecutor’s pre-trial promise not to rely on “any statement” made by Liburd required the prosecutor to do just that. The government responded by arguing that it did not know of the cheese statement until the eve of trial and argued it could not promise to not rely on a statement which it didn’t know about. The Court quickly rejected the government’s claim that a prosecutor could never make a promise regarding the use of undiscovered evidence. It also added that the claim was irrelevant - that once a prosecutor makes a promise to defense counsel or the court they are committed to keeping them.
The Court also determined that the prosecutor’s actions made a fair trial impossible in this case and therefore violated due process under the Fifth Amendment. Specifically, the prosecutor’s promise not to use any of Liburd’s statements affected his trial strategy - but for this promise, the strategy would have been different.
VACATED and REMANDED .
Mr. Liburd was in the St. Thomas airport intending to catch a flight to Atlanta. En route to his plane he passed through TSA security and one of the officers noticed on the scanner an image of two large organic masses located within his carry-on bag. He was therefore referred to an inspection station. While there, another TSA officer searched through his bag and asked about the two brick-like objects - Mr. Liburd told the officer that the bricks were “cheese.” Mr. Liburd was subsequently permitted to continue on to his flight. Then, while waiting for his flight, yet another TSA officer approached Mr. Liburd for a “random inspection” because he appeared to be nervous. Upon second search of his carry-on bag, Liburd made a statement that “there’s something in my bag” - the search revealed that the two brick-like objects were over 2 kilograms of cocaine.
Mr. Liburd was subsequently charged with possession with intent to distribute more than 500 grams of cocaine and attempted importation. Liburd moved to suppress the statement “there’s something in my bag” and the cocaine. Defense counsel did not move to suppress the cheese statement because, at that time, the statement had not been disclosed. At the suppression hearing, the district court asked the prosecutor if he intended to use Mr. Liburd’s statement at trial and the prosecutor stated, unequivocally, “No - that he wouldn’t rely on any statements” made by Mr. Liburd. As a result, the district court declined to rule on the admissibility of the statements.
On the eve of trial, the prosecutor disclosed Mr. Liburd’s cheese statement. And then, at trial, the prosecutor repeatedly admitted Mr. Liburd’s cheese statements. Defense counsel objected and ultimately requested a mistrial. The court declined the request for a mistrial but instead gave a curative instruction advising the jurors not to consider statements attributed to the defendant that were improperly introduced. Liburd was convicted and subsequently appealed.
On appeal, Liburd’s primary argument was that the prosecutor’s use of his cheese statement was misconduct, the misconduct violated his right to due process and the district court erred by refusing to grant a mistrial.
The Third Circuit Court of Appeals agreed - it determined that the prosecutor’s pre-trial promise not to rely on “any statement” made by Liburd required the prosecutor to do just that. The government responded by arguing that it did not know of the cheese statement until the eve of trial and argued it could not promise to not rely on a statement which it didn’t know about. The Court quickly rejected the government’s claim that a prosecutor could never make a promise regarding the use of undiscovered evidence. It also added that the claim was irrelevant - that once a prosecutor makes a promise to defense counsel or the court they are committed to keeping them.
The Court also determined that the prosecutor’s actions made a fair trial impossible in this case and therefore violated due process under the Fifth Amendment. Specifically, the prosecutor’s promise not to use any of Liburd’s statements affected his trial strategy - but for this promise, the strategy would have been different.
VACATED and REMANDED .
Conviction for Possession of a Weapon in a Prison affirmed
In United States v. Holmes, No. 09-2846 (W.D.PA 06/07/10), the Court of Appeals affirmed Mr. Holmes conviction for possession of a weapon in a prison.
Holmes was a prisoner at FCI - Loretto who was searched by prison guards and found to be in possession of a utility-knife blade. Holmes was subsequently charged with one count of possessing a weapon in a prison in violation of 18 U.S.C. § 1791.
Holmes proceeded to trial, was convicted and sentenced to 24 months incarceration. On appeal he made the following three claims: 1) the evidence at trial was insufficient for the jury to conclude the blade was a “weapon” within the meaning of 18 U.S.C. § 1791; 2) that the statute requires the government prove Holmes “knew” the blade was a weapon; and 3) that the district court erred when it refused to charge him with misdemeanor possession of a “prohibited object” as a lesser included offense.
As to the first claim, that the evidence was insufficient for the jury to conclude the blade was a “weapon,” Holmes argued that the definition of weapon should be an object whose primary purpose is for use in combat or an object that is inherently a weapon. Based on the invited error doctrine, the Court of Appeals rejected this argument, finding that this definition on appeal was much narrower than the definition proposed and adopted at trial. Specifically, trial counsel proposed a jury instruction which the district court adopted and advised the jury that the definition of a weapon is a “question of fact for you alone to decide.” Because the definition of “weapon” on appeal varied from the definition adopted at trial, the Court of Appeals declined to consider whether the definitions on appeal were correct. The Court then conducted a plenary review of the trial record in a light most favorable to the verdict winner and found the evidence to be sufficient - that blades are restricted items, that Holmes had no legitimate use for the blade the morning he possessed it, that he lied to the officers when asked if he had anything sharp, that he was hiding the blade, and that the prison guards testified they thought the item constituted a weapon. As a result the sufficiency claim was rejected.
As to the second claim, that the statute requires the government prove Holmes “knew” the blade was a weapon, the court of Appeals found that section 1791 had no scienter requirement but noted both parties agreed that a scienter requirement should be implied. The government argued that the statute requires only knowing possession of the object. In contrast, Holmes argued that he could only violate the statute if he knowingly possessed an object he knew was a weapon. The Court of Appeals rejected Holmes’ argument finding no support in the statute, that it lacked the support of congressional intent, and ignored the notion of the need for prison security - that prison security is threatened every time an inmate possesses a blade, regardless of whether or not the inmate “knows” it’s a weapon.
Finally, the Court of Appeals rejected Mr. Holmes third claim, that the district court erred when it refused to charge Holmes with misdemeanor possession of a “prohibited object” as a lesser included offense. The Court conducted a textual comparison between possession of a weapon in prison (§ 1791(d)(1)(B)) and possession of a prohibited object (§ 1791(d)(1)(F) - in doing so the Court found that § 1791(d)(1)(F) applies only to “any other object that threatens the order ... of a prison.” The Court determined that the use of “other” in this subsection meant that it “expressly exclude[d] items discussed in other subsections of § 1791(d)(1).” Because the elements of the misdemeanor offense were not a subset of the charged offense it could not be considered lesser included. AFFIRMED.
Holmes was a prisoner at FCI - Loretto who was searched by prison guards and found to be in possession of a utility-knife blade. Holmes was subsequently charged with one count of possessing a weapon in a prison in violation of 18 U.S.C. § 1791.
Holmes proceeded to trial, was convicted and sentenced to 24 months incarceration. On appeal he made the following three claims: 1) the evidence at trial was insufficient for the jury to conclude the blade was a “weapon” within the meaning of 18 U.S.C. § 1791; 2) that the statute requires the government prove Holmes “knew” the blade was a weapon; and 3) that the district court erred when it refused to charge him with misdemeanor possession of a “prohibited object” as a lesser included offense.
As to the first claim, that the evidence was insufficient for the jury to conclude the blade was a “weapon,” Holmes argued that the definition of weapon should be an object whose primary purpose is for use in combat or an object that is inherently a weapon. Based on the invited error doctrine, the Court of Appeals rejected this argument, finding that this definition on appeal was much narrower than the definition proposed and adopted at trial. Specifically, trial counsel proposed a jury instruction which the district court adopted and advised the jury that the definition of a weapon is a “question of fact for you alone to decide.” Because the definition of “weapon” on appeal varied from the definition adopted at trial, the Court of Appeals declined to consider whether the definitions on appeal were correct. The Court then conducted a plenary review of the trial record in a light most favorable to the verdict winner and found the evidence to be sufficient - that blades are restricted items, that Holmes had no legitimate use for the blade the morning he possessed it, that he lied to the officers when asked if he had anything sharp, that he was hiding the blade, and that the prison guards testified they thought the item constituted a weapon. As a result the sufficiency claim was rejected.
As to the second claim, that the statute requires the government prove Holmes “knew” the blade was a weapon, the court of Appeals found that section 1791 had no scienter requirement but noted both parties agreed that a scienter requirement should be implied. The government argued that the statute requires only knowing possession of the object. In contrast, Holmes argued that he could only violate the statute if he knowingly possessed an object he knew was a weapon. The Court of Appeals rejected Holmes’ argument finding no support in the statute, that it lacked the support of congressional intent, and ignored the notion of the need for prison security - that prison security is threatened every time an inmate possesses a blade, regardless of whether or not the inmate “knows” it’s a weapon.
Finally, the Court of Appeals rejected Mr. Holmes third claim, that the district court erred when it refused to charge Holmes with misdemeanor possession of a “prohibited object” as a lesser included offense. The Court conducted a textual comparison between possession of a weapon in prison (§ 1791(d)(1)(B)) and possession of a prohibited object (§ 1791(d)(1)(F) - in doing so the Court found that § 1791(d)(1)(F) applies only to “any other object that threatens the order ... of a prison.” The Court determined that the use of “other” in this subsection meant that it “expressly exclude[d] items discussed in other subsections of § 1791(d)(1).” Because the elements of the misdemeanor offense were not a subset of the charged offense it could not be considered lesser included. AFFIRMED.
Friday, June 25, 2010
Third Circuit Upholds Free Speech Rights of Anti-abortion Protestor Arrested for Demonstrating in Front of Liberty Bell Center.
In United States v. Michael Marcavage , No. 09-3573 (3d Cir. June 16, 2010), the defendant and some 20 others demonstrated in an anti-abortion protest – with graphic signs and use of a bullhorn – in front of the entrance to Philadelphia’s Liberty Bell Center in Independence National Historical Park, where a long line of tourists were waiting to enter. Although Marcavage did not have a written permit as National Park Service regulations require, a park ranger stated that he would give the demonstrators a verbal permit, but they had to move away from the entrance to a nearby designated demonstration area. When Marcavage refused to move, park rangers arrested him for violating the terms of the permit and interfering with Park Service functions, both misdemeanors. A U.S. Magistrate Judge in the Eastern District of Pennsylvania found him guilty on both counts after a two-day trial, sentencing him to 12 months’ probation. On appeal to a U.S. District Court Judge, the conviction and sentence were affirmed.
The Third Circuit overturned both convictions. First, the Court vacated the conviction on the permit violation count because a verbal permit is invalid, and so there was nothing valid for Marcavage to violate. Second, as to the conviction on the interference with park functions count, the Court necessarily addressed Marcavage’s Free Speech defense. The Court rejected the Government’s arguments that the sidewalk near the Liberty Bell Center is a nonpublic forum, and that its restriction of Marcavage’s speech was content neutral. While the Court expressed some sympathy to the park rangers’ intent to protect captive tourists on line from being disturbed by the bullhorn and offended by graphic images, the Court noted that a fundamental Free Speech principle is that the Government "may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable." The Court found that while the Government’s interests in restricting speech – "ensuring traffic flow and/or public safety, and regulating noise"– were legitimate, they were not sufficiently compelling to satisfy strict scrutiny. The Court noted that the demonstrators caused no more disturbance than others near the Liberty Bell entrance, including drivers of horse-drawn carriages, and that the Government did not prove that anyone was prevented from entering the park. Therefore, the Government "impermissibly infringed Marcavage’s First Amendment right to free speech."
U.S. Supreme Court Severely Restricts Scope of Sentence Reduction Proceedings under 18 U.S.C. § 3582(c)(2).
As suggested in this Blog’s May 2009 entry, the Third Circuit’s decision in United States v. Dillon, 572 F.3d 146 (3d Cir. 2009) has, indeed, effectively "ended crack litigation", as the Supreme Court, by a 7-1 vote, affirmed the Third Circuit in Dillon v. United States, No. 09-6338 (U.S. June 17, 2010). In brief, Justice Sotomayor’s majority opinion holds that proceedings brought by a defendant’s motion for sentence reduction under 18 U.S.C. § 3582(c)(2) are not governed by the same principles as standard plenary sentencing proceedings – notably, application of United States v. Booker, 543 U.S. 220 (2005) – but rather are limited to the specific reduction permitted by the Sentencing Commission’s relevant policy statement. The effect of Dillon, in light of the recent two-level reduction for crack offenses in the USSG § 2D1.1 drug tables, is to limit eligibility for that reduction only to defendants whose calculated Sentencing Guidelines range is actually reduced by two levels. Defendants with crack offenses whose Guidelines sentences involved career offender status, a Rule 11(c)(1)(C) plea, a mandatory minimum with USSG § 5K/§ 3553(e) relief, a sentencing range that remained unchanged after a two-level offense level reduction, or even an obvious Guidelines calculation error in the original sentencing are simply ineligible for § 3582(c)(2) relief.
Wednesday, June 02, 2010
"Clearly Established Federal Law" is Determined as of the Date of the Relevant State-Court Decision Subject to Habeas Review
Greene v. Palakovich, No. 07-2163 (3d Cir. May 28, 2010). A split panel of the Third Circuit held that for purposes of the standard of review for a federal habeas claim set forth in AEDPA, 28 U.S.C. §2254(d)(1), "clearly established Federal law" should be determined as of the date of the relevant state-court decision subject to habeas review. Greene was convicted of second degree murder, robbery and conspiracy and sentenced to life imprisonment. On appeal to the Pennsylvania Superior Court, Green argued, inter alia, that the admission at trial of redacted statements of his co-defendants violated the Confrontation Clause. The Superior Court rejected that claim in a decision dated December 16, 1997. That decision became the final state court decision for purposes of habeas review. Greene’s conviction became final on July 28, 1999. In the meantime, however, the Supreme Court decided Gray v. Maryland, 523 U.S. 185 (1998), on March 9, 1998, which supported Greene’s claim. The issue before the Third Circuit was whether the Gray case was to be considered "clearly established Federal law." The court held that it was not because the relevant state court decision was issued before Gray. One judge dissented opining that the relevant time frame should be the time that the conviction became final.
Drug Trafficking Conviciton Affirmed - No Problems with Time Frame of Conspiracy, Sufficiency of Evidence & Chain of Custody
United States v. Rawlins, No. 08-2948 (3d Cir. May 26, 2010). The Third Circuit affirmed the defendants drug trafficking conviction and rejected his arguments that:1) the indictment was invalid because it failed to allege the proper time frame for the conspiracy; 2) the evidence was insufficient to sustain the conviction, and; 3) there were gaps in the chain of custody of the evidence.
Rawlins was convicted of several counts of conspiracy and possession with intend to distribute cocaine. The evidence at rial suggested that Rawlins was a baggage handler at an airport and that he participated in a cocaine smuggling operation by switching tags from legitimate luggage to baggage containing cocaine. His first argument on appeal challenged the validity of the indictment which charged conspiracy "from a time unknown and continuing to September, 2004." The court of appeals rejected that argument because the overt acts alleged in the indictment "adequately limited the time frame of the conspiracy" and "all in all, the indictment was sufficient to apprise Rawlins of the charges against him, to enable him to prepare a defense, and to avoid double jeopardy on the same charge."
Rawlins also claimed that the evidence was insufficient to prove that he knew that the luggage that he moved contained cocaine. The Third Circuit found, however, that Rawlins’ "irregular and plainly illegal act of tag switching evidenced his knowledge of cocaine smuggling."
Lastly, although the court of appeals found that although there were gaps in the chain of custody of the cocaine admitted at trial, the district court did not err in admitting that evidence. DEA chemists testified that the substance they received was cocaine, however, there was no testimony regarding the transfer of the substance to the DEA labs from the facilities where they were stored in other states. The Third Circuit held that deference is owed to a district court’s determinations regarding chain of custody and they will be reversed only on a showing of abuse of discretion. Additionally, the court relied on a "presumption of regularity in the handling of evidence by law enforcement" in rejecting Rawlins’ claim.
Rawlins was convicted of several counts of conspiracy and possession with intend to distribute cocaine. The evidence at rial suggested that Rawlins was a baggage handler at an airport and that he participated in a cocaine smuggling operation by switching tags from legitimate luggage to baggage containing cocaine. His first argument on appeal challenged the validity of the indictment which charged conspiracy "from a time unknown and continuing to September, 2004." The court of appeals rejected that argument because the overt acts alleged in the indictment "adequately limited the time frame of the conspiracy" and "all in all, the indictment was sufficient to apprise Rawlins of the charges against him, to enable him to prepare a defense, and to avoid double jeopardy on the same charge."
Rawlins also claimed that the evidence was insufficient to prove that he knew that the luggage that he moved contained cocaine. The Third Circuit found, however, that Rawlins’ "irregular and plainly illegal act of tag switching evidenced his knowledge of cocaine smuggling."
Lastly, although the court of appeals found that although there were gaps in the chain of custody of the cocaine admitted at trial, the district court did not err in admitting that evidence. DEA chemists testified that the substance they received was cocaine, however, there was no testimony regarding the transfer of the substance to the DEA labs from the facilities where they were stored in other states. The Third Circuit held that deference is owed to a district court’s determinations regarding chain of custody and they will be reversed only on a showing of abuse of discretion. Additionally, the court relied on a "presumption of regularity in the handling of evidence by law enforcement" in rejecting Rawlins’ claim.
Friday, May 21, 2010
Child Pornography / Warrants / Sufficiency / Evidence of Age
U.S. v. Vosburgh, 2010 WL 1542340, April 20, 2010. Vosburgh appealed his conviction following a jury trial of possession and attempted possession of child pornography (18 U.S.C. § 2252). The investigation of Vosburgh began when an IP address linked to his account attempted to download child pornography on the internet. This, in addition to assertions that child pornography collectors maintain materials and rarely dispose of them, was the basis for issuance of a warrant to search Vosburgh’s apartment four months later. In his apartment agents seized an external hard drive which was later found to contain hundreds of images of "child erotica" (defined as sexually suggestive photos not sufficiently lascivious to meet the definition of sexually explicit conduct), and a thumbnail image file which contained two images of child pornography. The two images did not exist as independent picture files on the computer. The government asserted at trial that the existence of the thumbnail files indicated Vosburgh’s "prior possession" and viewing of the full image files, although they had since been deleted.
The Circuit affirmed the conviction in a lengthy opinion, finding that: (1) the warrant to search defendant's apartment, based on use of his IP address to access unlawful internet content four month’s earlier, provided a substantial basis for concluding there was a fair probability that contraband or evidence of an attempt to possess child pornography would be found in defendant's apartment; (2) the government did not constructively amend the indictment as to the count charging defendant with possession of child pornography by impermissibly changing its theory of prosecution, during closing argument, as to which visual depictions of child pornography-thumbnail images or full-size images-defendant unlawfully possessed; indictment did not charge defendant with possessing any particular depiction of child pornography, but with possessing a computer hard drive that contained visual depictions of child pornography, and any variance was not prejudicial as the defense at trial belied any claim of surprise; (3) the evidence was sufficient for the jury to make a finding on the government’s "prior possession" theory, where only thumbnails of files remained on the hard drive, and (4) admission of "child erotica" was not an abuse of discretion, as possession was probative of the defendant's interest in children, the limiting instruction was sufficient.
The Circuit affirmed the conviction in a lengthy opinion, finding that: (1) the warrant to search defendant's apartment, based on use of his IP address to access unlawful internet content four month’s earlier, provided a substantial basis for concluding there was a fair probability that contraband or evidence of an attempt to possess child pornography would be found in defendant's apartment; (2) the government did not constructively amend the indictment as to the count charging defendant with possession of child pornography by impermissibly changing its theory of prosecution, during closing argument, as to which visual depictions of child pornography-thumbnail images or full-size images-defendant unlawfully possessed; indictment did not charge defendant with possessing any particular depiction of child pornography, but with possessing a computer hard drive that contained visual depictions of child pornography, and any variance was not prejudicial as the defense at trial belied any claim of surprise; (3) the evidence was sufficient for the jury to make a finding on the government’s "prior possession" theory, where only thumbnails of files remained on the hard drive, and (4) admission of "child erotica" was not an abuse of discretion, as possession was probative of the defendant's interest in children, the limiting instruction was sufficient.
Monday, May 17, 2010
Defendant Liable for Co-conspirator’s Loss, Applying Victim Enhancement to One Conspirator Did Not Create Unwarranted Disparity
U.S. v. Robinson, 2010 WL 1610582, (April 22, 2010). Robinson pled guilty to conspiring to steal and convert United States Treasury checks in violation of 18 U.S.C. §§ 641 and 371, arising out of a scheme led by an individual named Jeffress, who provided "checkcashers"-Robinson and other individuals-with stolen Treasury checks and fake id, and drove them to checkcashing stores.
On appeal Robinson challenged the district court's calculation of his sentencing guideline range of 27 to 33 months, as it included the number and dollar amount of checks converted by another checkcasher, with whom Robinson contended he did not conspire. The Circuit affirmed the sentence, finding that the extra loss was properly attributable under § 1B1.3 given Robinson’s implicit agreement to cash stolen checks for Jeffress, the leader of the conspiracy, such that checks cashed by other checkcashers were reasonably foreseeable and within scope and in furtherance of their joint criminal activity. Robinson and the other checkcasher knew each other, Robinson knew that the checkcasher was cashing stolen checks for Jeffress, he and the other checkcasher were in same check-cashing store at the same time on two occasions, and an inference could be drawn that they came and went to that location together driven by Jefress.
Next, the Circuit rejected Robinson’s claim that application of a multiple-victim enhancement to his sentence created an unwarranted disparity where the same enhancement was not applied to a co-defendant. It reasoned that Robinson had failed to show that he was similarly situated to his co-defendant, finding no basis for concluding that the district court viewed co-defendant’s conduct similarly to Robinson's in terms of victims, particularly because the enhancement resulted from his being responsible for the previously mentioned checkcasher’s conduct as well.
On appeal Robinson challenged the district court's calculation of his sentencing guideline range of 27 to 33 months, as it included the number and dollar amount of checks converted by another checkcasher, with whom Robinson contended he did not conspire. The Circuit affirmed the sentence, finding that the extra loss was properly attributable under § 1B1.3 given Robinson’s implicit agreement to cash stolen checks for Jeffress, the leader of the conspiracy, such that checks cashed by other checkcashers were reasonably foreseeable and within scope and in furtherance of their joint criminal activity. Robinson and the other checkcasher knew each other, Robinson knew that the checkcasher was cashing stolen checks for Jeffress, he and the other checkcasher were in same check-cashing store at the same time on two occasions, and an inference could be drawn that they came and went to that location together driven by Jefress.
Next, the Circuit rejected Robinson’s claim that application of a multiple-victim enhancement to his sentence created an unwarranted disparity where the same enhancement was not applied to a co-defendant. It reasoned that Robinson had failed to show that he was similarly situated to his co-defendant, finding no basis for concluding that the district court viewed co-defendant’s conduct similarly to Robinson's in terms of victims, particularly because the enhancement resulted from his being responsible for the previously mentioned checkcasher’s conduct as well.
Sentence Below Career Offender Guideline Found Procedurally Unreasonable
United States v. Merced, 2010 WL 1542263, April 20, 2010. Merced pleaded guilty to a drug possession charge, his career offender guideline range was 188 - 235 months. At sentencing, the district court pointed to several factors in support of a below-guideline range, including the "street level" nature of Merced's previous crimes, his own possible drug problem, his troubled childhood, his strong family relationships, and the fact that his longest prior prison term was, at most, four years. The court addressed most of the § 3553 factors, but did not mention unwarranted disparity. The court also noted at one point "I kind of reserve career offender status for violent, significant drug deals, that type of thing, even though the guidelines may advise that it's appropriate." The court ultimately sentenced Merced to 60 months.
The Third Circuit, in an opinion thoroughly recapping reasonableness review precedent, found the sentence procedurally unreasonable based on two errors. First, based on the above statements, it found that the district court may have sentenced Merced pursuant to a personal policy disagreement with the scope of the career offender provision of U.S.S.G. § 4B1.1. While recognizing that a variance on such grounds may be permissible, the court explained that the district court must state clearly whether it is granting a variance based on a policy disagreement with § 4B1.1 and, if so, explain its reasoning more thoroughly. Second, the circuit found that the district court failed to analyze a highly relevant sentencing factor, § 3553(a)(6). Finding that Merced’s sentence may have created a risk of unwarranted disparity between similarly situated recidivist crack cocaine dealers, the district court should have considered this issue, and addressed the government's argument that a Guidelines sentence was necessary to promote uniformity in sentencing.
The Third Circuit, in an opinion thoroughly recapping reasonableness review precedent, found the sentence procedurally unreasonable based on two errors. First, based on the above statements, it found that the district court may have sentenced Merced pursuant to a personal policy disagreement with the scope of the career offender provision of U.S.S.G. § 4B1.1. While recognizing that a variance on such grounds may be permissible, the court explained that the district court must state clearly whether it is granting a variance based on a policy disagreement with § 4B1.1 and, if so, explain its reasoning more thoroughly. Second, the circuit found that the district court failed to analyze a highly relevant sentencing factor, § 3553(a)(6). Finding that Merced’s sentence may have created a risk of unwarranted disparity between similarly situated recidivist crack cocaine dealers, the district court should have considered this issue, and addressed the government's argument that a Guidelines sentence was necessary to promote uniformity in sentencing.
Friday, April 23, 2010
Securities Fraud / Fiduciary Obligations / Omission Liability / Materiality Expert
In U.S. v. Schiff, --- F.3d ----, 2010 WL 1338141, April 07, 2010, defendants were "high-ranking corporate executives" at a pharmaceutical company, indicted for orchestrating a securities fraud scheme in violation of 15 U.S.C. § 78j(b) and SEC Rule 10b-5. The government filed an interlocutory appeal over a district court order addressing several contested theories of liability as well as expert witness issues under Daubert.
In a lengthy opinion only briefly summarized here, the Court first addressed, and rejected, the viability of the government's legal theory that defendant had a fiduciary duty to rectify codefendant's allegedly material misstatements in subsequent SEC filings. Absent a duty to disclose, silence is not fraudulent or misleading under Rule 10b-5. Pursuant to Oran v. Stafford, a duty to disclose under Rule 10b-5 may arise only in three circumstances: when there is [1] insider trading, [2] a statute requiring disclosure, or [3] an inaccurate, incomplete or misleading prior disclosure. The Court rejected the government’s theory that "high corporate executives" have any general fiduciary obligation to disclose under Rule 10b-5. To the extent the Government argued an alternative theory that this duty to disclose based on statements of another rests instead on prong three of Oran (misstatements), the issue was waived.
The Court next rejected the government’s three liability theories – "all of a piece," "duty to update," and "duty to correct," – with respect to defendant’s omissions from his own statements, which did fall under Oran’s third prong as the allegations failed to suffice under those theories.
With regard to exclusion of the government's proposed expert-who would have testified to Bristol's stock price drop as evidence of Rule 10b-5's materiality element- the Circuit found no abuse of discretion. The methodology of the government's expert, did not fit the issues and was not relevant to primary issue of materiality, as the methodology failed to control for unrelated adverse events that were simultaneously disclosed and that could have caused stock price drop.
In a lengthy opinion only briefly summarized here, the Court first addressed, and rejected, the viability of the government's legal theory that defendant had a fiduciary duty to rectify codefendant's allegedly material misstatements in subsequent SEC filings. Absent a duty to disclose, silence is not fraudulent or misleading under Rule 10b-5. Pursuant to Oran v. Stafford, a duty to disclose under Rule 10b-5 may arise only in three circumstances: when there is [1] insider trading, [2] a statute requiring disclosure, or [3] an inaccurate, incomplete or misleading prior disclosure. The Court rejected the government’s theory that "high corporate executives" have any general fiduciary obligation to disclose under Rule 10b-5. To the extent the Government argued an alternative theory that this duty to disclose based on statements of another rests instead on prong three of Oran (misstatements), the issue was waived.
The Court next rejected the government’s three liability theories – "all of a piece," "duty to update," and "duty to correct," – with respect to defendant’s omissions from his own statements, which did fall under Oran’s third prong as the allegations failed to suffice under those theories.
With regard to exclusion of the government's proposed expert-who would have testified to Bristol's stock price drop as evidence of Rule 10b-5's materiality element- the Circuit found no abuse of discretion. The methodology of the government's expert, did not fit the issues and was not relevant to primary issue of materiality, as the methodology failed to control for unrelated adverse events that were simultaneously disclosed and that could have caused stock price drop.
Court Finds Inadvertent Out-of-jurisdiction Arrest Reasonable; Declines to Address Sentencing Entrapment and Manipulation Doctrines
In U.S. v. Sed, --- F.3d ----, 2010 WL 1292152 (Apr. 6, 2010), defendant, convicted of conspiracy to distribute and PWID, challenged (1) the validity of his arrest in Ohio by Pennsylvania state police and (2) the denial of a sentencing reduction based on sentencing entrapment and/or manipulation.
First addressing Sed’s arrest, the Circuit held it reasonable under Fourth Amendment despite the fact that Pennsylvania state police violated Ohio law by seizing him outside of their jurisdiction. The Court first rejected the notion that any violation of state law constituted an ipso facto violation of the Fourth Amendment, citing Virginia v. Moore, 553 U.S. 164 (2008). Next, the Court found the arrest reasonable under the totality analysis, based on the fact that defendant had committed a serious drug crime in Pennsylvania, was acting in furtherance of conspiracy to distribute drugs in Pennsylvania at time he was seized, was responsible for a last-minute change of plans such that the second controlled buy occurred close to the state line, and that the police intended to arrest Sed in Pennsylvania and believed that they had done so at the time.
Next the Court addressed Sed’s challenges to his sentence, claiming the police entrapped him into selling drugs in amounts beyond what he what he was predisposed to sell (sentencing entrapment) and that they unfairly strung out their investigation solely to increase the quantity of drugs he sold (sentencing factor manipulation). The Court noted a Circuit split, but declined to address the validity of the doctrines in this case. Instead, it found that Sed could not establish the requisite factual predicates for either, given the District Court found that Sed had perjured himself when he testified regarding his lack of predisposition to sell cocaine and also because the police were not required to arrest Sed after the first controlled purchase.
First addressing Sed’s arrest, the Circuit held it reasonable under Fourth Amendment despite the fact that Pennsylvania state police violated Ohio law by seizing him outside of their jurisdiction. The Court first rejected the notion that any violation of state law constituted an ipso facto violation of the Fourth Amendment, citing Virginia v. Moore, 553 U.S. 164 (2008). Next, the Court found the arrest reasonable under the totality analysis, based on the fact that defendant had committed a serious drug crime in Pennsylvania, was acting in furtherance of conspiracy to distribute drugs in Pennsylvania at time he was seized, was responsible for a last-minute change of plans such that the second controlled buy occurred close to the state line, and that the police intended to arrest Sed in Pennsylvania and believed that they had done so at the time.
Next the Court addressed Sed’s challenges to his sentence, claiming the police entrapped him into selling drugs in amounts beyond what he what he was predisposed to sell (sentencing entrapment) and that they unfairly strung out their investigation solely to increase the quantity of drugs he sold (sentencing factor manipulation). The Court noted a Circuit split, but declined to address the validity of the doctrines in this case. Instead, it found that Sed could not establish the requisite factual predicates for either, given the District Court found that Sed had perjured himself when he testified regarding his lack of predisposition to sell cocaine and also because the police were not required to arrest Sed after the first controlled purchase.
Thursday, March 25, 2010
"Seemingly innocent" activity sufficient to support probable cause for search warrant in light of initial tip and subsequent police surveillance
In United States v. Stearn, 08-3230 (3d Cir. March 9, 2010), the Third Circuit reversed a district court's suppression order after concluding that the searches conducted were supported by probable cause. Based on a tip from a confidential informant that defendants Michael and Joseph Doebley were selling cocaine powder supplied to them by Edward Stearn, police officers began surveillance of the defendants' homes and vehicles. The officers observed two controlled buys of cocaine involving one of the defendants, real estate records, utility bills, and police observation corroborated the informant's statement that defendants' cocaine business operated out of a gym, and the informant demonstrated knowledge of defendants' homes, cars, and daily routines. After the surveillance was completed, officers sought search warrants for five properties and 2 vehicles owned or frequented by the defendants. A magistrate judge issued the warrants and drugs, drug paraphernalia and money were recovered from all but one residence.
The district court granted the defendants' motions to suppress the recovered evidence because it found insufficient evidence of probable cause within the supporting search warrant affidavit. The court found that the affidavit contained no evidence regarding the reliability of the informant and no information connecting any of the searched locations to actual drug dealing activity. Because the court found the affidavit's defects so severe, it perfunctorily declined to apply the Leon "good faith" exception to the exclusionary rule. Finally, the court applied its suppression order to all of the defendants without determining standing as to each individual defendant.
On appeal, the Third Circuit found the district court's across-the-board exclusionary remedy to be a fundamental error. While the government had conceded each defendant's standing to challenge one or more specified searches, it actively disputed each defendant's right to challenge all the searches. The district court's failure to account for the government's defendant-specific concessions resulted in evidence being suppressed against a defendant who did not even challenge its admissibility, much less prove an expectation of privacy therein. Notwithstanding this fundamental error by the district court, however, the Third Circuit was unable to resolve the case on the standing prong alone because of the government's concessions regarding standing for each defendant as to one or more of the searches. Thus, the Court was compelled to determine the constitutionality of each search on a defendant-specific basis.
Turning to the probable cause determination, the Third Circuit found that the district court's probable cause analysis erroneously discounted the reliability of the confidential informant where the informant's tip was corroborated in significant part by independent police observation. Officers corroborated the defendants' drug involvement through two controlled buys, real estate records, utility bills, and the informant's knowledge of the defendants' homes, vehicles, and daily activities. Although there was no direct evidence that the defendants were dealing drugs out of their homes, the Court found circumstantial corroboration of the informant's tip in the defendants' "peculiar shuttling" among their properties and their frequent stops at a gym which police had linked to two drug deals. Finally, the Court found that the district court's refusal to consider Third Circuit precedent stating that it is reasonable, under certain circumstances, to infer that drug dealers often store evidence of drug crimes in their residences resulted from an unduly restrictive parsing of the case law.
Although the Third Circuit ultimately determined that the magistrate judge had a sufficient basis for his probable cause determination, it further held that, even if probable cause was lacking, the extreme sanction of exclusion was not warranted in this case. The Court noted that exclusion is a rare circumstance where a magistrate judge has found probable cause. Here, the district court improperly truncated its good faith analysis based on its erroneous characterization of the "bare bones" nature of the affidavit and its failure to credit circumstantial corroboration of the informant's tip. Furthermore, given the complexity of the district court's probable cause analysis, it was unreasonable to expect that lay officers executing the search warrant would have reasonably believed that the magistrate judge was incorrect in his probable cause determination.
Finally, examining each property in turn, the Third Circuit concluded that the informant's tip, in conjunction with the evidence adduced by officers in subsequent investigation, afforded the magistrate with a substantial basis for determining probable cause existed to search each of the properties at issue. The Court found each residence searched to be part of a network of suspiciously titled homes connected to at least one of the three defendants whose involvement in the drug trade had been confirmed through surveillance and controlled buys. Accordingly, the Court reversed the district court's suppression order and remanded the case for further proceedings.
The district court granted the defendants' motions to suppress the recovered evidence because it found insufficient evidence of probable cause within the supporting search warrant affidavit. The court found that the affidavit contained no evidence regarding the reliability of the informant and no information connecting any of the searched locations to actual drug dealing activity. Because the court found the affidavit's defects so severe, it perfunctorily declined to apply the Leon "good faith" exception to the exclusionary rule. Finally, the court applied its suppression order to all of the defendants without determining standing as to each individual defendant.
On appeal, the Third Circuit found the district court's across-the-board exclusionary remedy to be a fundamental error. While the government had conceded each defendant's standing to challenge one or more specified searches, it actively disputed each defendant's right to challenge all the searches. The district court's failure to account for the government's defendant-specific concessions resulted in evidence being suppressed against a defendant who did not even challenge its admissibility, much less prove an expectation of privacy therein. Notwithstanding this fundamental error by the district court, however, the Third Circuit was unable to resolve the case on the standing prong alone because of the government's concessions regarding standing for each defendant as to one or more of the searches. Thus, the Court was compelled to determine the constitutionality of each search on a defendant-specific basis.
Turning to the probable cause determination, the Third Circuit found that the district court's probable cause analysis erroneously discounted the reliability of the confidential informant where the informant's tip was corroborated in significant part by independent police observation. Officers corroborated the defendants' drug involvement through two controlled buys, real estate records, utility bills, and the informant's knowledge of the defendants' homes, vehicles, and daily activities. Although there was no direct evidence that the defendants were dealing drugs out of their homes, the Court found circumstantial corroboration of the informant's tip in the defendants' "peculiar shuttling" among their properties and their frequent stops at a gym which police had linked to two drug deals. Finally, the Court found that the district court's refusal to consider Third Circuit precedent stating that it is reasonable, under certain circumstances, to infer that drug dealers often store evidence of drug crimes in their residences resulted from an unduly restrictive parsing of the case law.
Although the Third Circuit ultimately determined that the magistrate judge had a sufficient basis for his probable cause determination, it further held that, even if probable cause was lacking, the extreme sanction of exclusion was not warranted in this case. The Court noted that exclusion is a rare circumstance where a magistrate judge has found probable cause. Here, the district court improperly truncated its good faith analysis based on its erroneous characterization of the "bare bones" nature of the affidavit and its failure to credit circumstantial corroboration of the informant's tip. Furthermore, given the complexity of the district court's probable cause analysis, it was unreasonable to expect that lay officers executing the search warrant would have reasonably believed that the magistrate judge was incorrect in his probable cause determination.
Finally, examining each property in turn, the Third Circuit concluded that the informant's tip, in conjunction with the evidence adduced by officers in subsequent investigation, afforded the magistrate with a substantial basis for determining probable cause existed to search each of the properties at issue. The Court found each residence searched to be part of a network of suspiciously titled homes connected to at least one of the three defendants whose involvement in the drug trade had been confirmed through surveillance and controlled buys. Accordingly, the Court reversed the district court's suppression order and remanded the case for further proceedings.
Monday, March 22, 2010
Sentence vacated and remanded where the district court did not properly apply U.S.S.G. 2C1.1(b)(2) to determine the amount of a "benefit received"
In United States v. Lianidis, No. 09-1165 (D.NJ 03/19/10), the Court of Appeals vacated and remanded for re-sentencing where the district court did not properly apply section 2C1.1(b)(2) - a guideline provision which determines the amount of a “benefit received” for sentencing purposes.
Lianidis was the president of DMS, a computer engineering company founded by her husband. DMS was subsequently awarded government contracts to set up computer systems for the FAA. These contracts were awarded by a longtime friend of Lianidis, Darrell Woods (an employee of the FAA), who had received numerous cash payments (i.e bribes) from Lianidis which totaled over $150,000. While the contracts were secured with bribes, the work performed by Lianidis’ company was deemed “legitimate.” Thereafter, over a six year period, the FAA paid Lianidis’ company more than $6.7 million dollars.
Because of the bribes, Lianidis was indicted and pled guilty to three counts of bribery of a federal employee. Of importance, there was a plea agreement which expressly stated there was no agreement under § 2C1.1(b)(2) as to the calculation of “value, benefit, and loss.” This was the subject of dispute at sentencing and then again on appeal.
Prior to sentencing, the probation office recommended a 16-level increase, under § 2C1.1(b)(2), concluding that the “benefit received” by Lianidis was between $1,000,000 and $2,500,000. At sentencing, the district court agreed - the court calculated the “benefit received” using two approaches: the first was the “Landers approach” (based on United States v. Landers, 68 F.3d 82 (5th Cir. 1995)); and the second was the “salary approach.” The "Landers approach" calculates “benefit received” by deducting direct costs, but not indirect costs, from the gross proceeds of the illegally obtained contracts. The “salary approach” uses the salaries earned as a proxy for the “benefit received.”
Using both approaches, the district court found that the “benefit received” was in excess of $1,000,000. Consequently, the 16 level enhancement under § 2C1.1(b)(2) was applied which increased Lianidis’ base offense level to 25. With a criminal history category I the advisory guideline range was 57 - 71 months. Due to Lianidis’ personal circumstances, the Court granted a nine month downward variance and sentenced her to 48 months imprisonment. Lianidis appealed.
On appeal, Lianidis argued that the district court erred both in the application and use of the “Landers approach” as well as the use of the “salary approach.” And, as a result, Lianidis argued the district court committed clear error in its application of the 16-level enhancement.
First, with regard to the “Landers approach,” Liandis argued that the “benefit received” should be calculated by subtracting “legitimate costs” from the gross revenue - a slightly different approach than the method used in Landers. The Third Circuit disagreed. The Court, referring to an application note of § 2C1.1, observed the phrase “benefit received” was discussed in terms of “net value” and “profit.” With regard to “net value” the Court, relying on Landers, found that only "direct costs" should be subtracted because “indirect costs, like bribes, do not impact the harm caused by the bribery, and allowing the deduction of interest costs would foster inconsistency in sentencing.”
Liandis argued in the alternative, should the Court apply the "Landers approach," that "direct costs" should include both company overhead as well as her and her husband’s salaries. In response, the Third Circuit again referred to Landers to determine what constituted a “direct cost.” After providing lengthy definitions of both “direct” and “indirect costs,” the Court stated “succinctly whether a cost is direct or indirect depends on whether it can be easily attributable to the specific contract at issue.” In Lianidis’ case, the district court concluded (without explanation) that the company overhead and salaries were not “direct costs.” Consequently, the Third Circuit remanded the matter because the district court did not engage in the proper analysis.
Finally, with regard to the “salary theory,” Lianidis argued that the district court erred in calculating the “benefit received” in terms of “profit” based on her and her husband’s salaries. Again citing an application note to § 2C1.1, the Third Circuit agreed, stating that the “benefit received” is not the salary earned (legally), but rather the “net value” received by the company pursuant to the government contract.
In conclusion, the Court adopted the Fifth Circuit’s approach in Landers and concluded that “the ‘benefit received’ under § 2C1.1(b)(2) is the net value, minus direct costs, accruing to the entity on whose behalf the defendant paid the bribe.”
Of note, while Judge Hardiman agreed with the majority’s adoption of the "Landers approach," he dissented. He found no clear error and thought the sentence should have therefore been affirmed.
Lianidis was the president of DMS, a computer engineering company founded by her husband. DMS was subsequently awarded government contracts to set up computer systems for the FAA. These contracts were awarded by a longtime friend of Lianidis, Darrell Woods (an employee of the FAA), who had received numerous cash payments (i.e bribes) from Lianidis which totaled over $150,000. While the contracts were secured with bribes, the work performed by Lianidis’ company was deemed “legitimate.” Thereafter, over a six year period, the FAA paid Lianidis’ company more than $6.7 million dollars.
Because of the bribes, Lianidis was indicted and pled guilty to three counts of bribery of a federal employee. Of importance, there was a plea agreement which expressly stated there was no agreement under § 2C1.1(b)(2) as to the calculation of “value, benefit, and loss.” This was the subject of dispute at sentencing and then again on appeal.
Prior to sentencing, the probation office recommended a 16-level increase, under § 2C1.1(b)(2), concluding that the “benefit received” by Lianidis was between $1,000,000 and $2,500,000. At sentencing, the district court agreed - the court calculated the “benefit received” using two approaches: the first was the “Landers approach” (based on United States v. Landers, 68 F.3d 82 (5th Cir. 1995)); and the second was the “salary approach.” The "Landers approach" calculates “benefit received” by deducting direct costs, but not indirect costs, from the gross proceeds of the illegally obtained contracts. The “salary approach” uses the salaries earned as a proxy for the “benefit received.”
Using both approaches, the district court found that the “benefit received” was in excess of $1,000,000. Consequently, the 16 level enhancement under § 2C1.1(b)(2) was applied which increased Lianidis’ base offense level to 25. With a criminal history category I the advisory guideline range was 57 - 71 months. Due to Lianidis’ personal circumstances, the Court granted a nine month downward variance and sentenced her to 48 months imprisonment. Lianidis appealed.
On appeal, Lianidis argued that the district court erred both in the application and use of the “Landers approach” as well as the use of the “salary approach.” And, as a result, Lianidis argued the district court committed clear error in its application of the 16-level enhancement.
First, with regard to the “Landers approach,” Liandis argued that the “benefit received” should be calculated by subtracting “legitimate costs” from the gross revenue - a slightly different approach than the method used in Landers. The Third Circuit disagreed. The Court, referring to an application note of § 2C1.1, observed the phrase “benefit received” was discussed in terms of “net value” and “profit.” With regard to “net value” the Court, relying on Landers, found that only "direct costs" should be subtracted because “indirect costs, like bribes, do not impact the harm caused by the bribery, and allowing the deduction of interest costs would foster inconsistency in sentencing.”
Liandis argued in the alternative, should the Court apply the "Landers approach," that "direct costs" should include both company overhead as well as her and her husband’s salaries. In response, the Third Circuit again referred to Landers to determine what constituted a “direct cost.” After providing lengthy definitions of both “direct” and “indirect costs,” the Court stated “succinctly whether a cost is direct or indirect depends on whether it can be easily attributable to the specific contract at issue.” In Lianidis’ case, the district court concluded (without explanation) that the company overhead and salaries were not “direct costs.” Consequently, the Third Circuit remanded the matter because the district court did not engage in the proper analysis.
Finally, with regard to the “salary theory,” Lianidis argued that the district court erred in calculating the “benefit received” in terms of “profit” based on her and her husband’s salaries. Again citing an application note to § 2C1.1, the Third Circuit agreed, stating that the “benefit received” is not the salary earned (legally), but rather the “net value” received by the company pursuant to the government contract.
In conclusion, the Court adopted the Fifth Circuit’s approach in Landers and concluded that “the ‘benefit received’ under § 2C1.1(b)(2) is the net value, minus direct costs, accruing to the entity on whose behalf the defendant paid the bribe.”
Of note, while Judge Hardiman agreed with the majority’s adoption of the "Landers approach," he dissented. He found no clear error and thought the sentence should have therefore been affirmed.
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