Clarifying The Meaning Of "Abuse of Discretion"

United States v. Hasan, Docket No. 08-4921-cr , 2009 WL 3737521 (2d Cir. Nov. 10, 2009) (found here)

In Hasan, the Second Circuit takes on the job of more clearly explaining what it means by "abuse of discretion" review in the sentencing context.  Here's what the court has to say:

Following United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), a district court has broad latitude to “impose either a Guidelines sentence or a non-Guidelines sentence.”  United States v. Sanchez, 517 F.3d 651, 660 (2d Cir. 2008); see also United States v. Cavera, 550 F.3d 180, 190 (2d Cir. 2008) (en banc).  Accordingly, the role of the Court of Appeals is limited to examining a sentence for reasonableness, which is akin to review under an “abuse-of-discretion” standard.  See Cavera, 550 F.3d at 190; see also Gall v. United States, 552 U.S. 38, 128 S.Ct. 586, 591, 169 L.Ed.2d 445 (2007) (holding that “courts of appeals must review all sentences-whether inside, just outside, or significantly outside the Guidelines range-under a deferential abuse-of-discretion standard”); cf. Sims v. Blot, 534 F.3d 117, 132 (2d Cir. 2008) (“A district court has abused its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence, or rendered a decision that cannot be located within the range of permissible decisions.” (internal alteration, citations, and quotation marks omitted)).  This standard applies “both to the [substantive reasonableness of the] sentence itself and to the procedures employed in arriving at the sentence.”  United States v. Verkhoglyad, 516 F.3d 122, 127 (2d Cir.2008) internal quotation marks omitted).

When a defendant challenges the district court's interpretation of a Guidelines provision, we review this interpretation of the Guidelines-just as we would review the interpretation of any law- de novo.  See, e.g., United States v. Hertular, 562 F.3d 433, 449 (2d Cir. 2009) (“In general, we review a district court's determination that a defendant deserves a[n] ... enhancement ... de novo.... ”).  De novo review of the interpretation of a Guidelines provision does not exceed the narrow appellate review prescribed by Gall.  128 S.Ct. at 591.  Rather, de novo review of the law is adequately captured in the deferential “abuse-of-discretion” standard that Gall requires.  Id.  As the oft-cited case Sims v. Blot, 534 F.3d 117, 132 (2d Cir. 2008), notes, “[a] district court has abused its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence or rendered a decision that cannot be located within the range of permissible decisions.” (internal alteration, citations, and quotation marks omitted) (emphasis added).  Put differently, a district court necessarily “abuses its discretion” if it makes an error of law. In this way, review for “abuse of discretion” and de novo review are not entirely distinct concepts, but rather, review for abuse of discretion incorporates, among other things, de novo review district court of rulings of law.  See, e.g., United States v. Legros, 529 F.3d 470, 473 (2d Cir. 2008) (“The abuse-of-discretion standard incorporates de novo review of questions of law (including interpretation of the Guidelines) and clear-error review of questions of fact.”).

Further complicating and confusing the discussion of standards of review is that “abuse of discretion” is a misnomer in the review of a district court's rulings on matters of law.  The interpretation of Guidelines provisions-or any law-is not “discretionary” in the ordinary sense of the word, see Webster's Third New International Dictionary 647 (1976) (defining “discretion” as “power of free decision or choice within certain legal bounds”), because, when there is a settled interpretation of a given law, judges do not exercise their “discretion” on whether or how to interpret or apply the law.  Instead, they attempt in good faith to apply relevant precedential interpretations of that law. Nevertheless, the phrase “abuse of discretion”-a phrase that has been a source of some confusion and more than occasional (and understandable) irritation to district judges-has an expansive definition in the federal courts. See Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 168 n. 4 (2d Cir. 2001).  This definition sweeps sufficiently far to define district court rulings that are based on erroneous conclusions of law as “abuses of discretion.”  See, e.g., Cooter & Gell v. Hartmax Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990); Sims, 534 F.3d at 132; Zervos, 252 F.3d at 169.  Understanding that appellate courts apply the term “abuse of discretion” to the overall review of a district court's implementation of a sentence and that the use of the term does not imply discretion on the part of the district judge in deciding a matter of law, we review the District Court's interpretation of the Guidelines here de novo.  See Belot v. Burge, 490 F.3d 201, 206-07 (2d Cir. 2007); see also Zervos, 252 F.3d at 167-69 (explaining the differences among de novo, clear-error, and abuse-of-discretion review).

Are we all clear on that now?

Is Substantive Reasonableness Review Dead?

United States v. Rigas, Docket Nos. 08-3485-cr (L), 08-3500-cr (CON), 08-3592-cr (CON), 08-3597-cr (CON), 2009 WL 3166066 (2d Cir. Oct. 5, 2009)

You remember the Rigas father and son team.  Convicted in June 2004 of perpetrating a massive fraud involving Adelphia Communications, they were sentenced to 15 and 20 years imprisonment, respectively.  Those sentences were reduced 12 and 17 years, respectively after remand following their initial appeal.  Well, they appealed again, arguing that, among other things, their sentences were substantively unreasonable.  The appeals were rejected.

In doing so, however, the Second Circuit finally put some meat on the bones of substantive reasonableness review.  And its not pretty from the defense perspective.  Specifically, the Second Circuit found that:

Our decisions addressing substantive reasonableness have focused more on the process of sentencing than on actually defining the boundaries of substantive reasonableness. Insofar as we have defined as “unreasonable” a sentence that cannot be “‘cannot be located within the range of permissible decisions,’” that definition is obviously circular--what is reasonable or unreasonable is what other cases have deemed reasonable or unreasonable. It is therefore unsurprising that several courts, including our own, have cautioned against converting review for substantive reasonableness into a “rubber stamp.”

In other areas of the law, we employ various concepts that seek to capture the same idea represented in the phrase “substantive reasonableness.” For example, we held that in considering a motion for a new trial in a criminal case following a jury verdict, the essential inquiry is whether a guilty verdict is manifestly unjust. We examine intentional torts by state actors under a similarly imprecise “shocks-the-conscience” standard.

The manifest-injustice, shocks-the-conscience, and substantive unreasonableness standards in appellate review share several common factors. First, they are deferential to district courts and provide relief only in the proverbial “rare case.” Second, they are highly contextual and do not permit easy repetition in successive cases. Third, they are dependent on the informed intuition of the appellate panel that applies these standards. In sum, these standards provide a backstop for those few cases that, although procedurally correct, would nonetheless damage the administration of justice because the sentence imposed was shockingly high, shockingly low, or otherwise unsupportable as a matter of law. Of course, an “intuitive” review cannot be an invitation to mischief by tinkering with any sentence that appellate judges simply do not like. Responsible appellate review of sentences necessarily places great trust in sentencing courts while still recognizing the responsibility to examine the actual sentence itself (quite apart from the procedures employed in arriving at the sentence).

Is the Second Circuit saying that a sentence can only be substantively unreasonable if it "shocks the conscience" or is "manifestly unjust"?  And, if so, is substantive reasonabless review (in practice) dead?

Imposing Role Adjustment Without Specific Factual Findings Constitutes "Plain Error"

United States v. Ware, 577 F.3d 442 (2d Cir. 2009)

Ware was convicted of securities fraud and conspiracy to commit securities fraud, and was sentenced principally to 97 months imprisonment.  Proceeding pro se on appeal, Ware challenged, among other things, the district court's application of a 4 level role enhancement.  At sentencing, though, Ware had not challenged the district court's role enhancement.  Accordingly, his challenge to the sufficiency of findings was reviewable only for plain error.  And the Second Circuit found such error to have occurred.  Specifically, it "conclude[d] that the findings of the district court are not sufficient to reveal a factual basis for the court's conclusion that Ware's criminal activity involved five or more 'participants' or was 'otherwise extensive' within the meaning of the Guidelines 3B1.1(a).  Thus, the Second Circuit reversed Ware's sentence, and remanded either for supplemental factual findings or for resentencing.

The underlying facts relating to the district court's conclusions concerning the absence of an adequate factual basis for the role enhancement are not as important as the larger point -- to wit, that it is "plain error" for a district court to impose a role enhancement whatever the circumstances without adequate findings of fact.  This is consistent with the Second Circuit's general direction concerning how sentencing hearings should  be conducted in the post-Booker world.  The only question is this: Will "plain error" analysis be extended to any other factual findings upon which sentences are based?

Close To The Line Of Procedural Unreasonableness

United States v. Bender, No. 08-3103-cr., 2009 WL 2476691 (2d Cir. Aug. 14, 2009)

Bender challenged the procedural and substantive reasonabless of his 120 month sentence.  Specifically, the Second Circuit noted that the district court had satisfied its obligation to make the requisite factual findings by indicating in its written judgment that it was adopting the findings set forth in the PSR.  But it "nevertheless" noted that "the court should have provided a written statement of the specific reasons for its sentence." 

After all, how can one be sure a sentence is fair if the sentencing judge doesn't explain the reasons for the sentence?  120 months is a long time to wonder why one is serving 120 months.

Short Interesting Commentary On The Upper End Of Substantive Reasonableness

United States v. Giordano, No. 07-3487-cr (2d Cir. Aug. 12, 2009) (found here)

Giordano challenged, among other things, the substantive reasonableness of his 37 year sentence for some clearly bad conduct that is not detailed in the Second Circuit's summary order.  Of interest to those interested in substantive unreasonableness, the Second Circuit noted that the "sentence is surely at the upper end of the range of reasonableness for these offenses, but we cannot say that this range has been exceeded."  What would?

Procedural Error For Presuming The Guidelines To Be Reasonable

United States v. Peguero, No. 07-2306-CR., 2009 WL 2524006 (2d Cir. Aug. 19, 2009)

Peguero appealed from a judgment sentencing him to 50 months imprisonment.  At sentencing the district court stated: "I have the ability to do justice and depart [or impose] a sentence independently of the Guidelines, but my opinion is that that is reserved for really special situations, and I even then take the Guidelines into serious consideration."  From the Second Circuit's viewpoint, that statement crossed the line.  Specifically, the Second Circuit found that "the district court presumed that the Guidelines sentence was reasonable," and therefore committed procedural error.

Rejection Of Non-5K Cooperation As A Basis For Non-Guidelines Sentence Affirmed On Appeal

United States v. Martin, No. 08-2622-cr., 2009 WL 2524003 (2d Cir. Aug. 19, 2009)

Martin appealed his 180 months sentence for a cocaine offense, which sentence was substantially below the sentencing range of 262 to 362 months recommended by the Guidelines.  The sole issue on appeal was whether the district court erred in declining to further reduce Martin's sentence to reflect his attempts to cooperate witht the Government.  Although acknowledging that the district court had the authority to depart downward based on non-5K cooperation, the Second Circuit ultimately rejected Martin's appeal because the district court's "reasons were thoroughly explained and manifestly reasonable."  Thus, the Second Circuit found no error in Martin's sentence -- in other words, a high level of deference to the district courts.

Possible Signal Concerning Higher Level Of Scrutiny For Restitution Orders From The Second Circuit?

United States v. Pearson, No. 07-0142-cr (2d Cir. July 2, 2009) (found here)

Pearson appealed from a judgment convicting him, following a guilty plea, of multiple counts of producing, transporting, receiving and possessing child pornography.  He was sentenced to fifteen years imprisonment and ordered to pay $974,902 in restitution to the child victims of his crime to account for future medical expenses.  On appeal, Pearson challenged whether a restitution order pursuant to 18 U.S.C. § 2259 may include an amount for future estimated medical expenses and, if so, whether the amount of restitution ordered was reasonable.  The Second Circuit answered "yes" to the first question (future medical expenses are authorized by the statute), but concluded "no" on the second question (the amount of the restitution ordered was not reasonable).

The Second Circuit acknowledged that it had not yet addressed the question of whether Section 2259 authorizes compensation for future medical expenses.  Relying on the conclusions of three of its sister circuits, the Second Circuit agreed that future medical expenses are contemplated by Section 2259 because "the amount of loss is too difficult to confirm or calculate."

But the Second Circuit also concluded that the district court failed to properly estimate those future medical expenses.  Specifically, "although the record contains evidence of the victims' need for long-term counseling and of the cost of that counseling, the district court did not explain how it estimated the victims' future expenses. . . . [W]ithout more information as to how the district court reached the lower figure, we are unable to conduct even deferential review of whether the final restitution order reflect a reasonable estimate of the cost of future counseling."  Accordingly, the Second Circuit remanded "to secure a more thorough explanation from the district court as to the basis for its restitution determination."

Could this have wide implications for, say, restitution in financial fraud cases in circumstances in which a district court does not build a sufficient record concerning restitution?  With United States v. Rutkoske in mind, is the Second Circuit signaling increased interest and awareness of restitution decisions?

No Surprise: Procedural Error Based On District Court's Adoption Of Two Different Advisory Guidelines Ranges

United States v. Hossain, No. 08-3805-cr (2d Cir. June 24, 2009)

Hossain complained about procedural error in his sentencing hearing -- specifically, the district court "erred by not calculating and identifying the applicable Sentencing Guidelines range and by failing to state the reasons for his sentence in open court."  The Second Circuit agreed that the district court's "sparse statements at the sentencing hearing and subsequent adoption of two different PSR addenda (and accordingly two different Guidelines ranges) in two separate Statements of Reasons, constitute unreasonable procedural error."  This "lack of clarity unduly frustrates the purposes of § 3553(c) -- to inform the defendant, the public, and relevant prison/probation officers of the reasons for imposition of a particular sentence and to permit meaningful appellate review." 

One final note: The sentence was obviously vacated and remanded for resentencing.  But the Second Circuit denied Hossain's request that it be assigned to a different judge.  Specifically, it found that "reassignment is not necessary in the circumstances presented, either for reasons of bias or to preserve to appearance of fairness."

A Series Of Procedural Errors

United States v. Weisberg, No. 07-CR-066A, 2009 WL 1373676 (W.D.N.Y. May 15, 2009)

A United States District Judge was compelled to reverse and remand the sentencing decision of a United States Magistrate Judge after discovering several procedural errors.  The lesson to be learned is this: Make a good record.

First, the magistrate judge "erroneously presumed that a within-the-Guidelines sentence should be applied absent exceptional circumstances.  In his initial sentencing decision, the Magistrate Judge found that '[t]he factors defendant suggests should warrant either a downward departure or imposition of a non-Guidelines sentence, collectively are not so extraordinary to justify a departure.'  This was error ebcause the Supreme Court made clear in Gall that post-Booker, there is no requirement that a sentencing court find 'extraordinary circumstances' in order to justify the imposition of a non-Guidelines sentence."

Second, the magistrate judge "erroneously applied a presumption of reasonableness to the advisory Guidelines range. . . .  [T]he Supreme Court has made clear that no presumption of reasononableness should be applied by the sentencing court."

Finally, the magistrate judge "was not required to sentence the defendant within the advisory Guidelines range unless he articulated a specified policy disagreement with the Guidelines.  While it is true that such a disagreement may provide a reason for imposing a non-Guidelines sentence . . . it does not follow that the failure to disagree with the policy statements mandates the sentence be within the advisory Guidelines range."