"Must Read" Opinion From Judge Gleeson (Having To Do With The Fraud Guidelines)

United States v. Ovid, No. 09-CR-216 (JG), 2010 WL 3940724 (E.D.N.Y. Oct. 1, 2010)

Judge Gleeson takes pen to paper again, but selects the fraud guidelines and the DOJ's June 28, 2010 letter to the Sentencing Commission as the target.  In sum, Judge Gleeson sentenced a white-collar offender to 60 months imprisonment, notwithstanding an advisory Guidelines range of 210 to 262 months (there was, of course, a 60 month statutory cap).  The whole decision is a "must read" for any defense lawyer.  Indeed, Judge Gleeson has important things to say about sentencing disparity as well as the role that appellate courts should play in cabining same.  But what's perhaps most interesting for defense lawyers is his "Preliminary Statement," which is quoted in full below:

In a letter dated June 28, 2010 to the Chair of the United States Sentencing Commission, the Director of the Office of Policy and Legislation of the United States Department of Justice (“DOJ” or the “Department”) decries the “evolution” of “two distinct and very different sentencing regimes.” Letter from Jonathan J. Wroblewski to the Hon. William K. Sessions III, at 2, 1 (June 28, 2010) (“DOJ Letter”). One “regime,” the letter contends, “includes the cases sentenced by federal judges who continue to impose sentences within the applicable guideline range for most offenders and most offenses.” Id. at 1. This is apparently the good regime. The “second regime,” by contrast, “has largely lost its moorings to the sentencing guidelines.” Id. at 2. This regime is a cause of concern for the Department. It consists of judges who sentence fraud offenders, especially in high-loss cases, “inconsistently and without regard to the federal sentencing guidelines.” Id. at 4. The Department concludes on this issue (the letter addresses various others as well) that “[t]he current sentencing outcomes in [fraud] cases are unacceptable, and the Commission should determine whether some reforms are needed.” Id . at 5. In short, the premise of the letter is that unless the sentences in fraud cases are “moored” to the advisory ranges provided by the United States Sentencing Guidelines, they produce “unwarranted sentencing disparities” that are “extremely problematic.” Id. at 2.

The DOJ Letter recommends, inter alia, a systemic analysis and synthesis by the Commission of the federal sentencing data it has collected, followed by a report that “explore[s] how to create a single sentencing regime that will earn the respect of the vast majority of judges, prosecutors, defense attorneys, Members of Congress, probation officers, and the public.” Id. at 3. It also suggests that “reforms might include amendments to the sentencing guideline for fraud offenses.” Id. at 5.

The Department is an important influence in the formulation of sentencing policy. Jonathan Wroblewski, the author of the letter, is a thoughtful and well-respected expert in the area. Finally, the Attorney General enjoys ex officio membership on the Sentencing Commission, and Mr. Wroblewski is the Attorney General's designee to that post. For all these reasons, the DOJ Letter to the Commission will carry great weight.

The sentencing of Isaac Ovid on July 30, 2010 illustrates well the fact that, here in the trenches where fraud sentences are actually imposed, there is a more nuanced reality than the DOJ Letter suggests. The letter describes two “dichotomous regimes” in fraud cases-one moored to the Guidelines, the other adrift in the vast regions beneath the low end of the advisory Guidelines ranges. Id. at 2. But Ovid's sentencing shows otherwise. Specifically, it shows how the fraud guideline, despite its excessive complexity, still does not account for many of the myriad factors that are properly considered in fashioning just sentences, and indeed no workable guideline could ever do so. This reality does not render the Guidelines irrelevant in fraud cases; they are in fact quite useful in all sentencings. But sentencing judges know that a full consideration of “the nature and circumstances of the offense and the history and characteristics of the defendant,” 18 U.S.C. § 3553(a)(1), implicates offense and offender characteristics that are too numerous and varied, and occur in too many different combinations, to be captured, much less quantified, in the Commission's Guidelines Manual. A consideration of those and the other factors set forth in § 3553(a) produces sentences that are moored to fairness, and to the goals of sentencing set forth in § 3553(a)(2) but sometimes not so much to the advisory Guidelines range. Indeed, in some cases the fair sentence can drift quite far away from the advisory range, which is, after all, but one of eight factors the sentencing judge must consider.

Ovid's sentencing reveals that the Department knows this as well. Aggressive, experienced, successful white collar prosecutors understand that it does not undermine the Sentencing Guidelines at all, much less create some kind of rogue sentencing regime, when the consideration of factors set forth in 18 U.S.C. § 3663(a) produces a sentence that happens to be substantially below the advisory range.

I support the Department's call for Sentencing Commission review of fraud sentences. But in determining whether reforms are needed, and especially in determining whether the existing guideline should be burdened with even more adjustments, the Commission should examine whether our system already provides an adequate solution for the claimed “unacceptable” outcomes the Department complains about. I suggest that it does, in the form of appellate review, and for all of the handwringing in the DOJ Letter about unacceptable sentences, the Department for the most part has not even tried to avail itself of that solution.

 

Good Summary Of Law Concerning Appellate Sentencing Review In The Second Circuit

United States v. Bonilla, Docket No. 09-1799-cr (2d Cir. Aug. 13, 2010) (found here) -- If you're looking for a good summary of the law and rules governing appellate sentencing review in the Second Circuit, look no further than Bonilla:

We review sentences for abuse of discretion, a standard that "incorporates de novo review of questions of law (including interpretation of the [Sentencing] Guidelines) and clear-error review of questions of fact."  United States v. Legros, 529 F.3d 470, 474 (2d Cir. 2008).  In applying the abuse of discretion standard in sentencing appeals, we are constrained to review for reasonableness.  See Gall v. United States, 552 U.S. 38, 46 (2007).  It is by now familiar doctrine that "[t]his form of appellate scrutiny encompasses two components: procedural review and substative review.  United States v. Cavera, 550 F.3d 180, 189 (2d Cir. 2008) (en banc).  Upon substantive review, a trial court's sentencing decision will be classified as error only if it "cannot be located within the range of permissible decisions."  Id. (internal quotation marks omitted).  The length of the sentence imposed is what is examined on substative review.  United States v. Villafuerte, 502 F.3d 204, 206 (2d Cir. 2007).  Substantive reasonableness review can take place any time following procedural reasonableness review, including during the same appeal.  See Gall v. United States, 552 U.S. 38, 51 (2007) ("[An appellate court] must first ensure that the district court committed no significant procedural error . . . [and,] [a]ssuming that the district court's sentencing decision is procedurally sound, the appellate court should then consider the substantive reasonableness of the sentence implosed . . . ."); see also United States v. Dorvee, __ F.3d __, 2010 WL 3023799, at *7 (2d Cir. Aug. 4, 2010) (noting that we are empowered to address "both the procedural and substantive reasonableness of [a] sentence in the course of an appeal where we find both types of error").  In engaging in substantive reasonableness review we recall that

[t]he 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.

United States v. Rigas, 583 F.3d 108, 123 (2d Cir. 2009) (footnote omitted).

With respet to procedural review,

a district court commits procedural error where it fails to calculate the Guidelines range (unless omission of the calculation is justified), makes a mistake in its Guidelines calculation, or treats the Guidelines as mandatory.  It also errs procedurally if it does not consider the 3553(a) factors, or rests its sentence on a clearly erroneous finding of fact.  Moreover, a district court errs if it fails adequately to explain its chosen sentence, and must include an explanation for any deviation from the Guidelines range.

Cavera, 550 F.3d at 190 (internal citations and quotations omitted).

In arriving at a sentencing decision, the District Court must consider the now-advisory Guidelines, for they are the "starting point and the initial benchmark," Gall, 552 U.S. at 49, and are not to be treated as only a "body of casual advise," United States v. Crosby, 397 F.3d 103, 113 (2d Cir. 2005).  The process of sentence selection and the place of the Sentencing Guidelines in that process has been established as follows:

First, the Guidelines are no longer mandatory.  Second, the sentencing judge must consider the Guidelines and all of the other factors listed in Section 3553(a).  Third, consideration of the Guidelines will normally require determination of the applicable Guidelines range, or at least identification of the arguably applicable ranges, and consideration of applicable policy statements.  Fourth, the sentencing judge should decide, after considering the Guidelines and all the other factors set forth in section 3553(a), whether (i) to impose the sentence that would have been imposed under the Guidelines, i.e., a sentence within the applicable Guidelines range or within permissible departure authority, or (ii) to impose a non-Guidelines sentence.  Fifth, the sentencing judge is entitled to find all the facts appropriate for determining either a Guidelines sentence or a non-Guidelines sentence.

Crosby, 397 F.3d at 113.

A sentencing court is free to vary from the Guidelines on the basis of a policy disagreement with the Guidelines.  Indeed, we have held that "a district court may vary from the Guidelines range based solely on a policy disagreement with the Guidelines, even where that [policy] disagreement applies to a wide class of offenders or offenses."  Cavera, 550 F.3d at 191.  In Kimbrough v. United States, 552 U.S. 85 (2007), the Supreme Court found that a district court was entitled to conclude that the existing Guidelines provision for crack cocaine was greater than necessary to meet the standards of 3553(a) because the provision "d[id] not exemplify the Commission exercise of its characteristic institutional role."  Id. at 109.

We recently determined that "[t]he district court committed procedural error when it concluded that it could not consider a broad, policy-based challenge to the child pornography Guidelines."  United States v. Tutty, __ F.3d __, 2010 WL 2794601, at *3 (2d Cir. July 16, 2010).  In United States v. Dorvee, __ F.3d __, 2010 WL 3023799, at *9 (2d Cir. Aug. 4, 2010), we noted that "Sentencing Guideines are typically . . . based on data about past sentencing practices but that "the Commission did not use this empiracal approach in formulating the Guidelines for child pornography," acting instead at the direction of Congress.  We suggested in Dorvee that a sentencing court could, in the exercise of its broad discretion, take into account the "unusual provenance" of the Guidelines in cases of that nature.  Id. at *12. 

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?

Note To Appellate Lawyers: Getting Away From An Appeal Waiver

United States v. Peter, No. 08-1544-cr (2d Cir. April 10, 2009) (found here)

Peter is, for the most part, an unremarkable procedural and substantive unreasonableness appeal.  But Peter's plea agreement contained an appellate waiver (just as most plea agreements do).  Yet, Peter was permitted to proceed with her appeal because the district court never adequately discussed that waiver with her on the record -- thereby opening up the opportunity for the appeal. 

It's therefore clearly important (when reviewing records on appeal) to be on the lookout for this potential loophole.  As the Second Circuit found:

Although Peter’s cooperation agreement contained a waiver of her right to appeal, the government concedes that the district court never questioned Peter on the record regarding her understanding of the waiver, and hence has not moved to dismiss the appeal as waived.  Gov’t Br. 7 n.5; see United States v. Tang, 214 F.3d 365, 368 (2d Cir. 2000) (“[A] waiver of the right to appeal should only be enforced by an appellate court if the record ‘clearly demonstrates’ that the waiver was both knowing . . . and voluntary.” (alteration in original) (internal quotation marks omitted)).  Accordingly, we do not further consider the waiver.

The Distinction Between The Obligations Of District And Circuit Courts

United States v. Williams, et al., Docket Nos. 05-4928-cr(L), 05-4956-cr(Con) (2d Cir. Jan. 30, 2007) (found here)

Two quick points concerning Williams.

First, the Second Circuit held that it has the authority to review a sentence for reasonableness following a Crosby remand regardless of whether the district court takes the opportunity to resentence pursuant to Crosby ("We hold that we review a sentence for reasonableness even after a District Court declines to resentence pursuant to Crosby").  This makes sense.

Second, the Second Circuit found that the district court did not fail to comply with 18 U.S.C. § 3553(a) when it stated at resentencing that it was obligated to impose a reasonable sentence after considering the § 3553(a) factors.  In doing so, the Second Circuit distinguished between the obligations of district courts (to impose sentences "pursuant to the requirements of § 3553(a) -- including the requirements of § 3553(a)'s parsimony clause") and the obligations of appellate courts ("to review the sentences actually imposed by district courts for reasonableness"). 

Is there really such a clear distinction?  Surely, district courts look to have their sentencing decisions affirmed on appeal -- whether based on ego or on serving the goal of complying with the law.  And, with the knowledge that their sentencing decisions will be reviewed for reasonableness, isn't it reasonable for district courts to consider whether or not a sentence is reasonable?  And, particularly after Claiborne (hopefully) clears up what reasonableness review entails, won't district courts be even more careful to confirm that the sentences they impose are, in fact, reasonable?

Within Guidelines Sentence Affirmed As Reasonable

United States v. Munroe, No. 05-3806CR, 05-2807CR, 2006 WL 354640 (2d Cir. Feb. 14, 2006)

In one of what is surely to be a series of decisions affirming Guidelines sentences as reasonable, the Second Circuit affirmed a 77 month sentence as reasonable for illegal reentry where the Guidelines range was 77 to 96 months.

Of interest in Munroe, however, is the dicta concerning circuit courts' jurisdiction to review district court sentences that have properly considered all 3553(a) factors and that are within the Guidelines range for the sentence.  A movement is afoot in which the Government has argued that appellate courts have no jurisdiction to review within Guidelines sentences if a district court properly considered all of the 3553(a) factors.  In Munroe, the Second Circuit hinted that it would reject such an argument, as numerous other circuit courts already have.  Specifically, the Second Circuit stated that it "assum[ed] arguendo" that it had jurisdiction to review Munroe's sentence.