Court Decides Indictment Error SOR, Evaluates Speedy Trial Claim

United States v. Terrell Stevenson, No. 15-1942, concerns a “hip-hop heroin hub” called Hood Promo.  Following a federal investigation, 8 people were indicted on drug and weapons charges.  All of them pled guilty, except Stevenson.  On appeal, Stevenson argued that the Court, which granted his Speedy Trial motion, should have dismissed the indictment with prejudice.  He also argued that the indictment failed to allege all the elements of the crime of fraud in relation to identification documents, and he appealed the District Court’s denial of his motions to suppress, the propriety of the district court’s conduct at trial, and the reasonableness of his 360-month sentence.

The Speedy Trial Act, 18 U.S.C. §§ 3161–3174, requires that a trial start “within seventy days from the filing date (and making public) of the information or indictment.  § 3161(c)(1). This deadline is not absolute, however, because certain periods of delay “shall be excluded . . . in computing the time within which the trial . . . must commence.” 18 U.S.C. § 3161(h).  The most common form of “excludable” delay results from the filing and disposition of pretrial motions. 18 U.S.C. § 3161(h)(1)(D).  When a violation is found, the court may dismiss the indictment with or without prejudice, depending on three factors (1) seriousness of the offense; (2) reason for the delay; and (3) administration of justice.  18 U.S.C. § 3162(a)(2).  The Court found that the offense here was serious, that the delay was largely due to the repeated delays and chaotic nature of the litigation (which it blamed on the 8 defendants, finding that any government contribution was relatively innocent and harmless), and it found no prejudice to Stevenson from the delay (the fact that a case gets stronger over time – including by coD pleas – is not prejudice, for purposes of the statute).  The district court did not err in looking at the number of excludable days in the context of factor (2).

The Court also addressed what it called a “close case” of sufficiency of the indictment on fraud in relation to identification documents.  The Court found an implied reference to interstate commerce in the indictment’s description of interstate activity.  But it found that any failure would have been harmless (and applied harmless error review here, because Supreme Court guidance in analogous circumstances – citing Neder on jury instructions – suggests defective indictments do not constitute “structural” error).

Circuit Addresses Definition of "Investment Advisor" for First Time

In United States v. Miller, No. 15-2577, the Court affirmed Miller’s securities fraud and tax evasion sentence for selling fake promissory notes to investors and squandering their money ($41 million worth).  In its first opinion addressing the definition of “investment advisor” under the Investment Advisers Act of 1940, 15 U.S.C. § 80b-2(a)(11), the Court held that the district court properly applied the investment advisor enhancement, U.S.S.G. § 2B1.1(b)(19)(A)(iii), because Miller was an investment advisor.  In addition, the Court found that the government had not breached the plea agreement and that the sentence was substantively reasonable.

The Court held that, considering the broad definition of “investment advisor” in the statute, the fact that no exception in the statute applied to Miller, and that the Sentencing Guidelines adopt the definition from the statute, Miller’s activities qualified him for the enhancement.  The statute defines “investment advisor” as any person who, for compensation, engages in the business of advising others on investments.  Miller conceded that he gave personal advice to some victims.  The advice given by others to the remaining victims constituted relevant conduct.  Miller was in the business of advising, because he held himself out as an advisor, and was registered as such.  And, he received compensation including the principal provided by investors, which he converted to his own use.

The Court’s review of the other issues was less substantive.  The breach of plea was reviewed on plain error, because the objection wasn’t clear.  The Court found no breach, because the government, at worst, wavered in response to pressure from the district court.  The Court found the 120-month sentence reasonable, given that the district court accounted for Miller’s poor health, and because of the “predatory and pernicious” nature of the crime.

Term of Imprisonment is Synonymous with Sentence of Imprisonment under U.S.S.G. §4A1.2

Commonwealth v Hector Rengifo, N. 15-1779, August 5, 2016

   

           This case answers the burning question, “When does a Pennsylvania time served to twelve month sentence equal of sentence of almost two and one-half years for the purposes of the U.S.S.G.?” Mr. Rengifo pled guilty to distributing heroin in violation of 21 U.S.C. §841(a)(1). Prior convictions though subjected him to the possibility of an enhanced sentence as a “career offender” under U.S.G. 4B1.1(a). Key to whether or not one of those convictions actually counted towards making him a career offender was a prior Pennsylvania conviction for possession of marijuana with intent to distribute and for which he received a sentence of time served to twelve months that evolved, by virtue of two parole violations and sentences, into a prior sentence of imprisonment exceeding one year and one month, whenever imposed, that resulted in the defendant being incarcerated during any part of fifteen years within the time the defendant’s instant offense occurred.  U.S.G.G. §§ 4A1.2(e)(1), (e)(2).

            Even though Mr. Rengifo, as the result of his parole violation served only 365 days, i.e., every day of his sentence, the Government contended and the District Court agreed, that U.S.G.G. §4A1.2(k)(1), which states how to measure prior terms of imprisonment, requires adding the time serbed as a result of the violations— 294 days—  not to the original 71 days he served, but to the twelve month sentence he received. Even though “term of imprisonment” is not defined in the guidelines, the Court of appeals that “term of imprisonment” and “sentence of imprisonment” are interchangeable in U.S.G.G. §§ 4A1.2(e)(1), (e)(2) and §4A1.2 (k)(1). The Court of Appeals in fact concluded that as a result of its interpretation of the term of imprison, Mr. Rengifo actually served much more than the government contended, because in the Court’s calculation, just as you counted both the time served and the time left on parole in the original sentence, the District Court was required to do the same with the parole violations, i.e., increase the “term of imprisonment” calculation by adding both the time served after the violation and time left on parole after reparole. In other words, the time from the commencement of a defendants’ sentence until he is ultimately release from supervision and incarceration are lumped together to determine the sentence— 833 days as opposed to the government’s calculation of 659 days. (Perhaps sentences consecutive to a grant of parole grant a reprieve, but I would not count on it.)

Bribery case against Senator Menendez can proceed: advocacy for physician friend is not protected under the Speech and Debate clause of the U.S. Constitution

In United States v. Menendez, 15-3459,
http://www2.ca3.uscourts.gov/opinarch/153459p.pdf, 2016 WL 4056037 (3d Cir. July 29, 2016), the Third Circuit rejected Senator Menendez’s appeal that his indictment should be dismissed. The issue was whether advocacy on behalf of two concerns of Menendez’s physician friend, Dr. Melgen, was protected under the Speech and Debate Clause, U.S. Const. Art. 1, §6, cl. 1. The two issues were (1) allegations that Dr. Melgen overbilled the Center for Medicaid and Medicare Services (CMS) $ 8.9 million from 2007 to 2008 and (2) a contract (x-ray technology) dispute between Dr. Melgen and a company in the Dominican Republic. Menendez narrowed the issue to 5 allegedly legislative acts: meetings, calls, and staff communications with high-ranking Executive officials in the Department of Health and Human Services.

The Court explained that the Speech and Debate clause, which states that "members of Congress shall not be questioned in any other Place for any Speech or Debate in either House," extends to legislative acts. First, a court must determine if an act is clearly legislative (i.e., subpoeanaing records for committee hearings) and so protected, or clearly non-legislative (i.e., legitimate constituent services or illegitimate bribe taking) and so not protected. If an act is ambiguous (i.e., a trip by a legislator), then the Court looks to the particular circumstances to analyze content, purpose and motive. The Court rejected the government’s hardline rule that the Speech and Debate clause does not protect legislative attempts to influence the Executive, which would place legitimate policy-based efforts under the specter of indictment.

Notwithstanding their constitutional relevance, the historical facts found by the District Court were reviewed for clear error with the burden on Menendez. The Third Circuit found clear error was not evident: the disputed acts basically amounted to lobbying on behalf of a particular party and so non-legislative and not protected. The Court rejected the factual challenges based on (1) the actual content of the meetings, (2) the preparation for the meetings, (3) Dr. Melgen’s interest in following up with Menendez after the meetings, and (4) rejecting Menendez’s narrow lens when reciting the facts. Moreover, Menendez’s staff’s request for information from the Executive which would be protected was too bound up in specific advocacy, and so the entire communication was analyzed, and found to be non-legislative.

The Court also rejected a separation-of-powers and speech-and debate-clause challenge that violation of a Senate financial disclosure rule could only be punishable in the Senate, not by the Executive under 18 U.S.C. §1001. The Court addressed the venue issue (D.C., not N.J., was the proper venue) with regard to the financial disclosure under mandamus review and denied it because the allegations were sufficient that material facts were concealed in N.J. before the document was filed in D.C.

Johnson’s holding that ACCA’s residual clause is void for vagueness applies to the residual clause of the career offender guideline, U.S.S.G. § 4B1.2

In United States v. Calabretta,14-3969, http://www2.ca3.uscourts.gov/opinarch/143969p1.pdf, 2016 WL 3997215 (3d Cir. July 26, 2016), the Third Circuit held that the residual clause of the career offender guideline, U.S.S.G. § 4B1.2, was unconstitutionally vague. The Court looked to prior case law that interpreted the crime of violence definition in the Guidelines identically to the violent felony definition in ACCA and applied the Supreme Court’s reasoning in Johnson v. United States (2015) which had invalidated the residual clause of ACCA as unconstitutionally vague.

(The predicate crime of violence here was second-degree eluding contrary to N.J.S.A. 2C:29-2(b), which the parties agreed was only a crime of violence under the residual clause).

The Court applied the vagueness doctrine to the guidelines relying on caselaw that the guidelines are sufficiently law-like to be subject to constitutional limitations. The Court noted that the guidelines are the beginning of all sentencing determinations, calling them a “starting point” and “framework for anchoring sentencing decisions” so that a miscalculation led to due process concerns of fair notice and arbitrary enforcement.

The Court specifically declined to consider two issues: (1) whether its ruling applied to residual clauses other than 4B1.2. It noted that the language in 4B1.2 was identical to ACCA and also included the list of four enumerated offenses like ACCA (burglary, arson, extortion, and crimes involving the use of explosives) that might have contributed to the clause’s arbitrariness and unpredictability; and (2) whether its ruling on 4B1.2 was retroactive.

Next, the Court found the case should be remanded under plain error review.

First, the Court found the error affected Calabretta's substantial rights. The career offender guideline range was 188 to 235 months. The non-career offender guideline range was 108 to 135 months. If the drugs minus two amendment had been applied, the guideline range would have been 87 to 108 months. Even though the sentencing court granted a variance to 120 months, the Third Circuit ruled that the sentence was not made irrespective of the incorrectly calculated guideline range. The Third Circuit heavily quoted a recent Supreme Court case, Molina-Martinez v. United States, 136 S.Ct. 1338 (2016) to state that “when a defendant is sentenced under in incorrect guideline range – whether or not the defendant’s ultimate sentence falls within the correct range – the error can, and most often will, be sufficient to show a reasonable probability of a different outcome absent the error.” In the ordinary case, a defendant can satisfy his burden on prong three. The Court emphasized the sheer magnitude of the error here (87 or 108 months being the low end of the guidelines without the error, as compared to 188 months), as contributing to its conclusion.

The Court found prong four, an error that seriously affects the fairness, integrity, or public reputation of the judicial proceedings, would be met if it were to affirm a sentenced “imposed against the backdrop of a legally incorrect career offender designation and a significantly higher Guidelines range.” Given that the sentencing court had varied downward from the guideline, it was possible the court would impose a sentence below the guidelines if they were properly calculated, and “uncertainty weighs in favor of resentencing, not affirmance.” (quoting Molina-Martinez, 136 S.Ct. at 1347). A sentencing judge’s statement that it was imposing the “minimum sentence sufficient” could not shield it from plain or harmless error review. Judge Fisher dissented on prong four, finding that evidence in the record overwhelmingly supported the 120-month sentence.

Did the Third Circuit Intend to Severely Narrow the Statement-Against-Penal-Interest Hearsay Exception, and to Encourage New Investigation in Habeas Proceedings?

Navigating through some murky jurisprudential waters, the Third Circuit may have steered a bit off course, and unnecessarily so. In a precedential opinion issued without oral argument, Staruh v. Superintendent Cambridge SpringsSCI, No. 15-1650 (3d Cir.  June 30,2016), the Third Circuit seems to have ruled that a third-party’s extra-judicial exculpatory confession is admissible only when the declarant is available to testify, even though the statement-against-penal-interest hearsay exception, by its terms, applies when the declarant is not available to testify. See, e.g., Fed. R. Evid. 804(b)(3). Before discussing the specifics of the case, a nutshell discussion of relevant law may prove useful.

The Supreme Court has recognized that state evidentiary rules that categorically exclude hearsay evidence—when critical to the defense and with persuasive assurances of trustworthiness—can violate due process. In Chambers v. Mississippi, 410 U.S. 284 (1973), a state hearsay rule precluded defendant from introducing testimony of witnesses to whom a third person had confessed to committing the murder for which Chambers was on trial. The court noted that the hearsay statements bore substantial assurances of trustworthiness having been made spontaneously to a close acquaintance shortly after the murder, the confessions were corroborated by other evidence (including their sheer number), and each confession was self-incriminating and against self-interest. Id. at 300-01. The Court concluded that "where constitutional rights directly affecting the ascertainment of guilt are implicated, the hearsay rule may not be applied mechanistically to defeat the ends of justice." Id. at 302. But Chambers does not go so far as to hold that a defendant is denied a fair opportunity to defend himself whenever a state rule  excludes favorable evidence, see United States v. Scheffer, 523 U.S. 303, 316 (1998); nor does Chambers undermine a state’s “broad latitude . . . to establish rules excluding evidence from criminal trials." Holmes v. South Carolina, 547 U.S. 319, 324 (2006). Those cases do not require that a trial court must allow the admission of untrustworthy hearsay statements as evidence of third party guilt to satisfy the Constitution. It is categorically excluding evidence under evidentiary rules that "infring[e] upon a weighty interest of the accused" or "that serve no legitimate purpose or that are disproportionate to the ends that they are asserted to promote" that violates due process. Holmes, Holmes v. South Carolina, 547 U.S. 319, 324, 326 (2006).

In Staruh, Defendant Mom was charged with first and third degree murder in the blunt-force-trauma death of her three-year old child. About two years after the child’s death, Defendant’s mother (Grandmom), with whom Defendant’s family lived, pleaded guilty to endangering the welfare of a child based upon the conditions of her home, and specifically denied abusing the child. But about one year later, just before Mom’s trial, Grandmom confessed to Mom’s investigator on more than one occasion that she had abused the child, killing him, and that Mom did not abuse him. When served with a subpoena to testify at Mom’s trial, Grandmom told the investigator that Mom “is innocent but my Attorney said I could get in trouble if I say this in court so I can’t.” 

At trial, the defense focused on Grandmom as the perpetrator. Outside the jury’s presence, defense counsel called her as a witness, but she stated that she would assert her Fifth Amendment privilege not to testify. Defense counsel requested permission to force Grandmom to assert her Fifth Amendment privilege in front of the jury, which the trial court denied. Defense counsel then requested permission to call the investigator as a witness to testify to Grandmom’s exculpatory hearsay confessions as a statement against penal interest, because, as the evidentiary rule required, Grandmom was now unavailable to testify. The trial court denied this request, finding that the statement was “blatant hearsay” and that it was not “trustworthy.”  The jury acquitted Mom of first-degree murder, but found her guilty of, among other things, third-degree murder, and she was sentenced to a prison term of 18 to 40 years. 

On appeal to the Pennsylvania Superior Court, Mom argued that the trial court erred in excluding the investigator’s testimony as to Grandmom’s hearsay confession, since her invocation of the Fifth Amendment made her unavailable to testify. The Superior Court affirmed, holding that the circumstances of Grandmom’s confession did not provide sufficient assurance of reliability, because she confessed for the first time just days before Mom’s trial, she did not sign a confession, she never intended to be held accountable for her statements, and she would benefit from confessing by her daughter’s acquittal. Mom’s PCRA Petition, raising the same issue, was dismissed.

Mom’s Section 2254 habeas petition raised again the trial court’s error in excluding the investigator’s testimony concerning Grandmom’s confession. The Magistrate Judge determined that the Superior Court reasonably concluded that Grandmom’s exculpatory statements were not sufficiently reliable, noting that her refusal to testify rendered her unavailable for cross-examination, thus distinguishing this case from Chambers v. Mississippi, 410 U.S. 284 (1973), in which the Court emphasized the availability of the declarant for purposes of cross-examination. The District Court adopted the Magistrate’s Report, reasoning that, unlike Chambers, Grandmom was unavailable for cross-examination, her extrajudicial exculpatory statement was uttered on the eve of trial, and it could not be confirmed by other evidence.

Having granted a certificate of appealability respecting the Chambers issue, the Third Circuit affirmed, denying habeas relief. The Court, noting that that Grandmom maintained her innocence for more than two years after the murder,  determined that Grandmom’s confessions had “no indicia of credibility” because she asserted her Fifth Amendment privilege “hoping to prevent her daughter from being convicted of murder by confessing to the crime, while at the same time avoiding criminal liability herself. . . . This appears to be a ‘justice-subverting ploy’ that provides the justification for requiring indicia of truthfulness.”

Rather than re-invent the wheel, I will include here commentary on this case by habeas/appellate star Matthew Stiegler (www.StieglerLaw.com) in his always perceptive CA3Blog (http://thirdcircuitblog.com), who proffered this astute analysis of the Court’s opinion:

I question the court’s reasoning. Maybe the grandmom was lying to protect the mom. It’s possible. But it’s also possible that grandmom was the real murderer, her repeated and detailed and never-repudiated confession was the truth, and her refusal to affirm it was choosing her own freedom over the mom’s. The court’s certainty about which possibility is the truth, seemingly arrived at with no subsequent evidence or fact-finding about grandmom’s actual motivations, seems unwarranted. That seems like a choice for juries allowed to hear all the facts, not appellate courts.

 

In the opinion’s most dangerous passage, the court stated in a footnote that the grandmother’s unwillingness to testify “is extremely probative of the truth of her statements.” Read broadly, this language is nothing less than a repudiation of the penal-interest hearsay exception. The whole reason defendants like the mother seek to get in hearsay statements against penal interest is that the alternate perpetrator isn’t willing to repeat the confession in court. If the hearsay is never reliable enough when the declarant won’t testify at trial, then the penal-interest rule is an umbrella you can use only when it’s not raining. I hope that the court clarifies this critical point on rehearing or in a future case.

 

Curiously, in a footnote, the Court noted as significant that Mom’s counsel, in the habeas proceeding, did not “obtain an affidavit from [Grandmom] reaffirming her confession at any point during the federal habeas proceeding, casting further doubt on its truthfulness.” But wouldn’t such an affidavit would violate the Court’s admonition that “the evidence against which a federal court measures the reasonableness of the state court's factual findings is the record evidence at the time of the state court's adjudication.” Rountree v. Balicki, 640 F.3d 530, 538 (3d Cir. 2011). In any event, this opinion strongly suggests that practitioners should consider undertaking new investigation in habeas proceedings.