August 4, 2011

The Second Circuit Grants A New Trial: Why Market Movements Should Come With Cliff Notes

Causation is tricky.

So often we infer what caused what from the order things happen in - the government fails to reach an agreement on the debt ceiling, and the stock market drops. We conclude that one causes the other.

What do we do when there are multiple causes of a movement in stock price? If Greece defaults at the same time new job numbers are released, can we say which causes the movement of a stock price?

If you're just chatting about the markets, it probably doesn't matter. You don't need to answer the question of what caused the market action - it can be overdetermined.

If, however, you're the United States government, and you are trying to show that a series of actions mattered to investors, you are going to want to show that they affected the stock price. But what to do about all the other things that affected the stock price?

This question was taken up by the Second Circuit in United States v. Ferguson.

There, executives at General Reinsurance and an executive at AIG were convicted of numerous charges - conspiracy, mail fraud, securities fraud, and making false statements to the Securities and Exchange Commission.

The basis of the charges was a reinsurance transaction between the two companies. Such a transaction is, apparently, normally done to mitigate risk. Here, there was, the government alleged, no risk to mitigate - the transaction was intended solely to create an accounting illusion about AIG's reserves so that its stock price would not suffer.

Would you believe this was an actual trial exhibit?

To prove fraud, the government has to prove that a false statement is material - that it matters to someone in some decision they have to make. In this case, the government wanted to prove that it mattered to investors; that the reinsurance transaction affected the stock price.

The problem, though, is that lots of things affect stock price. At the same time at issue in the case, AIG was being accused of "bid-rigging, improper self-dealing, earnings manipulations, and more." Each of these allegations also affected AIG's stock price.

So, for the folks on trial to challenge whether the reinsurance contract affected the stock price, they would have had to argue that it wasn't the allegedly fraudulent reinsurance contract, rather it was the allegedly unlawful bid-rigging.

It's kind of like arguing that you couldn't have killed Tom because you were busy robbing Mary across town. It doesn't sit well with a jury.

The defendants offered to just agree that the reinsurance contract affected the stock price, so it wouldn't have to be submitted to the jury. The government, though, wouldn't agree.

This likely seems odd. The government thinks something happened. Why can't the defendant just agree, then that would be one less thing that the jury needs to worry about? The answer is that the Supreme Court has held that a defendant can't prevent the government from putting on the salacious bit of its case just by stipulating to it. The case is called Old Chief. It's how we know jury nullification works both at least one ways.

So the government wouldn't stipulate that the stock price dropped. Instead, they introduced a chart showing that the stock price dropped. But everyone agreed that the chart was inaccurate, because it reflected a drop in the price that was caused by other allegations of misconduct other than those in the trial.

The Second Circuit held that this was soup. The government doesn't have to stipulate to an element of the offense, but they can't use that as a mechanism to introduce misleading evidence. Moreover, the government really played the falling stock price up to the jury, arguing that:

[B]ehind every share of [AIG] stock is a living and breathing person who plunked down his or her hard-earned money and bought a share of stock, maybe [to] put it in their retirement[] accounts, maybe to put it in their kids' college funds, or maybe to make a little extra money for the family.

As a result, the Second Circuit vacated the conviction and ordered a new trial.

As an aside, it's nice to see that Seth Waxman came into the case on the side of the lead defendant. I'm sure I'll bump into him at a National Association of Criminal Defense Lawyers meeting soon.

FYI, I'm late to the party. Everyone and their mother has written about this. See:

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

August 3, 2011

Arrests Are Not Convictions: A Sentencing Judge Is Reversed For An Excess of Candor

Thomas Johnson was no stranger to the law. Growing up in New Orleans, the twenty-four year old had been arrested at least 15 times. Three of those arrests resulted in convictions.

Mr. Johnson said that in his neighborhood, to get arrests, the cops would pull up whenever there were a group of guys on the corner and arrest the ones the cops were able to catch.

This is probably not the corner where Mr. Johnson was arrested.

One time when the police pulled up on a group of young men on a New Orleans corner, Mr. Johnson ran. As he ran, he threw a silver and black object from his pants. That object happened to be a gun.

He pled guilty to being a felon in possession of a firearm in federal court in Louisiana. His sentencing guidelines range was 37 to 46 months.

The government asked the court to sentence him to 70 months in prison, almost twice the bottom of the guidelines range. The government supported this request by noting, among other things, that Mr. Johnson had been arrested twelve times without being convicted. The three times he was convicted, he only received probation. So, the government reasoned, Mr. Johnson needed to be sentenced to a lot of time in this case to make up for the time he didn't get before (or something like that).

The district court looked at his 12 past arrests and thought that where there's smoke, there's fire. Because the facts of the 12 arrests were all pretty similar - cop pulls up to corner, Mr. Johnson, with others, runs and the cops chase him - the court figured that Mr. Johnson was probably doing something illegal each time. He was sentenced accordingly, to 63 months in prison.

His lawyer objected to the district court's use of the prior arrest records. They are, after all, just arrests, not convictions. If it's unfair to use someone's past convictions against them, it's so much more unfair to use the person's past arrests.

The Fifth Circuit, in United States v. Johnson, agreed.

Noting that all the facts found by the district court at sentencing have to be sufficiently reliable to satisfy due process - meaning, basically, you've got to know that the information the judge is using when he imposes sentence is reliable - the court of appeals held that the district court cannot use an arrest record as evidence of prior illegal conduct.

The Fifth Circuit, in other words, rejected the district court's "where there's smoke there's fire" reasoning. Or, to use the Fifth Circuit's fancier words, "[w]e have long recognized that an arrest, without more, is quite consistent with innocence."

This is a good result. Congratulations to Mr. Johnson, and his lawyer.

Here's what I'm troubled by. In every federal sentencing, the court asks the United States Probation Office to prepare a presentence report. It's required by Rule 32(c) of the Federal Rules of Criminal Procedure.

The presentence report is supposed to be a financial, employment, educational, family, and medical history of the person about to be sentenced. It also includes a criminal history. Here's a link to a blank presentence report form so you can see what's in it.

The criminal history section always includes the person's past arrests that did not result in a conviction.

If, as the Fifth Circuit so rightly says, "an arrest . . . is quite consistent with innocence," why do sentencing courts get pages and pages of arrests when they're looking at what information to consider before a sentencing hearing?

Each arrest gets two or three paragraphs. Most people's children get a sentence or two buried at the end of one paragraph. Are arrests, which a district court is supposed to ignore, more important than a person's kids? If you look at the space devoted to the topics in the presentence report, then it's hard to say that the answer, from the court's point of view, is anything but yes.

The problem with Johnson, I suspect, is that this district court judge was simply excessively honest. This kind of reversal won't happen often. Sentencing judges see arrest records all the time - the system is set up to force them to see these arrest records. Most judges, I suspect, simply don't mention them if they matter because no district court judge wants to be reversed.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

August 2, 2011

Appellate Advocate Wins A Chance To Save His Client $100

Just because you win, doesn't mean you win something you want.

Gary Dudeck pled guilty to three charges: possessing child pornography, receiving child pornography, and receipt of images depicting minors engaged in sexual activity.*

The district court sentenced him to ten years on each of the three counts, and ran the sentence concurrently.

Mr. Dudeck appealed, and argued that he can't be guilty of all three of these charges.

While there's a lot that double jeopardy doesn't mean, double jeopardy prevents a person from being convicted of the same crime twice.

So, if you commit an assault and an aggravated assault, where an aggravated assault is basically just defined as an assault plus some kind of aggravating factor, at sentencing, the court should dismiss the assault, and only sentence you for the aggravated assault.


Mr. Dudeck argued that receiving child pornography requires possessing child pornography, so that his conviction of possession should be ignored. Otherwise, it would violate double jeopardy.

The Sixth Circuit agreed that receipt of child pornography includes possession of child pornography in his case, United States v. Dudeck. The court remanded because it wasn't clear whether the images that supported the possession count were the same ones that supported the receipt count.

And, if Mr. Dudeck prevails, what does he get? The sentencing court already made clear that the sentence for receipt and possession should be the same. And the court already ran them concurrent to one another.

Mr. Dudeck, if he wins on this argument, as the potential to save himself $100. Every criminal defendant has to pay $100 for every felony count that he or she is convicted of. It's the law.

If Mr. Dudeck's possession conviction is overturned, he saves himself a full one hundred dollars.

 

* You may wonder what the difference is between receiving child pornography and receiving images depicting minors engaging in sexual activity. Basically, receiving child pornography - pictures involving real children - is a separate crime that receiving images that contain "virtual" children. If the image is real child porn, its receipt is prohibited by 18 U.S.C. S 2252(a)(2). If the image is of a virtual child, receipt is prohibited by 18 U.S.C. S 2252A(a)(2), which relies on a broader definition of child pornography.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

August 1, 2011

The Past Can Catch Up With You: Rule 404(b) and a New Trial In North Dakota

I spend a decent amount of time talking to people who have been charged with a crime. Perhaps more than most people. It is amazing how many people's understanding of the law differs from what the law actually is.

The double jeopardy clause may be the part of the criminal law least understood by people who are not in the criminal justice system. The double jeopardy clause prevents the federal government, or a state government, from prosecuting you twice for the same crime.

Here are some things that the double jeopardy clause does not prevent:

  • Being prosecuted in a federal court for the same conduct that was in a state case.
  • Having a higher sentencing guidelines range because of a prior conviction
  • The government telling the judge at sentencing that you have a prior conviction
  • Having a higher mandatory minimum because of a prior conviction
  • The jury in a case being told about your prior conviction

That last one is hard. The double jeopardy clause doesn't prevent the government from telling the jury about a person's prior conviction for a similar crime.

That doesn't mean, of course, that a prosecutor's ability to tell the jury about a prior conviction is boundless. It is bounded by Federal Rule of Evidence 404(b).

Rule 404(b) says that a prior bad act, like a criminal conviction, can be presented to a jury as long as it isn't being presented just to prove that the person on trial is a bad person, but, rather, that he or she has "motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident".

In an outlier case, this rule makes some sense - if a guy was previously convicted of committing a murder while wearing a pink prom dress, and is on trial again for committing a new murder in a pink prom dress, we can probably agree that the jury may find his prior pink prom dress murder particularly helpful. The government isn't introducing the evidence just to make him seem like a bad guy, but like a very particular kind of pink-prom-dress-murdering bad guy.

The way the rule is written is slippery though. The Eighth Circuit's recent case, United States v. Williams, shows how slippery this can be.

Mr. Williams was on trial for drug distribution. He had a prior conviction for drug distribution. The government wanted to tell the jury about his prior conviction to prove that he knew how being a drug dealer worked. Knowledge, of course, is a reason to introduce evidence under 404(b).

This let the government go hog wild on Williams knowledge of the drug dealing life. The facts of the case (see for yourself in the opinion) don't really show that Williams needed to know much more than what a regular viewer of The Wire would know. Yet Rule 404(b) let the government tell the jury over and over again - "mark[ing] Williams as a previous drug dealer."

The district court, thankfully, found that the government went too far. They were simply tarring Williams with his past conviction. Sadly, this district court may be an outlier. Rule 404(b) is routinely stretched to allow any kind of prior criminal conduct that was related in almost any way to go to a jury.

 

* And, by the way, kudos to the district court for having the humility to correct a prior mistake. Though, he's not in the Sixth Circuit.

  • As bad as the courts have made Rule 404(b), at least it's not Texas, see Mean But Stupid

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 28, 2011

The Ninth Circuit on Mandatory Minimums, Safety Valve, and Timetravel

Whenever there is a law that says a person who did a specific thing has to suffer a specific punishment, with no exceptions, there will be an application of that law that ordinary people think is unfair.

In New Jersey, two fourteen-year-olds now have to register as sex offenders for a relatively common locker room prank. A six-year old excited about joining cub scouts was suspended for school for forty days under a zero-tolerance policy because he brought a camping tool to school that included a butter knife.

In federal court, there are mandatory minimums in drug distribution cases. These mandatory minimums produce unfair results. People with minor involvement in cases can be required to serve massive sentences of ten or twenty years, and the judge who imposes that sentence has no lawful ability to go below that amount of time.

To make mandatory minimums ever so slightly less unfair, Congress has created something called a "safety value." It's in 18 U.S.C. 3553(f). In the sentencing guidelines, it's in section 5C1.2.

Basically, a person convicted of drug dealing qualifies for the safety value if they:

Safety Valve

(1) didn't hurt anyone,

(2) didn't have gun,

(3) weren't in charge of the drug dealing,

(4) tell the government about their involvement in the drug dealing, and

(5) don't have much prior involvement with the criminal justice system.

The last requirement, that they not have much criminal history, is the subject of the Ninth Circuit's opinion in United States v. Yepez.

The requirement of minimal criminal history, stated more precisely, is a requirement that the person have no more than one criminal history point under the United States Sentencing Guidelines. Criminal history points are assessed as set out in section 4A1.1.

Basically, any conviction where the person serves no time, or less than sixty days in jail, gets one point. But, if the person is on probation during the crime that lands them in federal court, they will receive two additional points.

Mr. Yepez received a DUI conviction when he was 18. He was on probation for it when he drove some meth for someone else.*

Everyone agreed he met every requirement of being safety valve eligible, except he had three criminal history points. One for the original conviction, and two because he was on probation when he drove the drugs. As a result, instead of receiving a sentence of five years, the district court judge found that it had no choice but to sentence Yepez to ten years in a federal prison.

The Ninth Circuit, though, disagreed. Because Yepez's lawyer had gone back to state court and asked the state judge to retroactively end Yepez's probation the day before he committed the federal crime, the Ninth Circuit held that Yepez was not on probation when he committed the crime.

California law lets a judge change a prior order nunc pro tunc. The concept of a nunc pro tunc ruling is probably my favorite legal idea. Basically, it lets a judge time travel to a prior date and issue a ruling from that date that is in effect for all times in the future from that date.

So, as a matter of California law, the nun pro tunc change meant that Yepez wasn't on probation when he drove the meth. The Ninth Circuit held that meant he only had one criminal history point and, therefore, was safety valve eligible.

Senior District Judge Timlin, sitting by designation, dissented. Following the Eighth and Tenth Circuits, he would have said that the federal government doesn't care what a state court does nunc pro tunc. The feds, in essence, don't smile on that kind of time travel.

Professor Berman wonders if the government will seek cert from the Supreme Court on this question.

Personally, I hope not. These distinctions are undignified. A man will spend five years in prison, or not, depending on something as arbitrary as whether a state court judge has the power to change probation in the past.

If the act of deciding what sentence a person gets is a moral act, an act where we, as a society, show our judgments about how we think of justice and blameworthiness, then surely making such decisions turn on the technicalities of judicial time travel fails.

* According to the opinion, he thought it was marijuana. This is, of course, an odd defense. The district court, in any event, found it plausible, since the guy was only 20 years old.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 27, 2011

The Fourth Circuit Finds that the Police Can't Assume You're A Drug Trafficker Just Because You Clean Your Car, Have Toiletries, and Don't Want Your Shirts Wrinkled

What good is a hunch if you can't say why you have it? If you want to stay inside the Fourth Amendment, not much.

Stephen Digiovanni was driving through Maryland. He was stopped by the Maryland State Police for following too close to another car.

The officer who pulled him over, though, was a member of a Pro-Active Criminal Enforcement Team, a task force set up to investigate drug and terrorist activities. When the officer pulled Mr. Digiovanni over, he didn't see a man in his late fifties driving from Florida to Boston. No, this officer saw a drug trafficker.*

How did the officer know Mr. Digiovanni was a drug trafficker? The officer explained it was a combination of little things. For one thing, Mr. Digiovanni's car was clean. Also, it was a rental car. And he had some shirts hanging up in the back seat. Also, he had a hygiene bag with him. So, naturally, the officer suspected Mr. Digiovanni of being a drug trafficker.

The officer asked Mr. Digiovanni to step out of the car. He asked Mr. Digiovanni what his travel plans were and whether he had drugs. Mr. Digiovanni said he was traveling back to Boston from a trip to Florida and that he didn't have any drugs with him.

The officer asked Mr. Digiovanni if he specifically had any marijuana in the car. Mr. Digiovanni said that he had never smoked marijuana because it puts him to sleep.**

The officer asked if he could search the car. Mr. Digiovanni said ok. Luckily for him, he had trouble opening the trunk, so the officer gave up after three minutes, went back to the police car, and ran his license and registration.

When the license and registration check came back negative, the officer brought Mr. Digiovanni a warning ticket, his license, and his rental car registration. The officer told him that he was free to go, but his earlier consent to search was still in effect and couldn't be withdrawn. He gave Mr. Digiovanni a written consent to search form, which Mr. Digiovanni signed.

The officer, and a backup, found just over 34,000 pills of Oxycodone. He was charged in federal court in Baltimore with possession with intent to distribute Oxycodone.

Clearly, the driver of this car is carrying drugs.

Mr. Digiovanni filed a motion to suppress the pills taken from his car. The Honorable Catherine C. Blake, widely know as a wise and fair jurist, granted the motion.

By way of background, a police officer can, of course, pull a driver over for a violation of the traffic law. But the officer can't keep a person pulled over for longer than giving them the traffic ticket would take, unless the officer has a reasonable, articulable suspicion that the person driving the car has committed a crime.

Judge Blake determined that the officer kept Mr. Digiovanni by the side of the road longer than necessary to run his license and issue a warning ticket. She found there was no reasonable suspicion of him as a drug dealer, since, as the Fourth Circuit put it, his "appearance and demeanor fit in the category of a retired person, one driving from Florida to the northeast."

Judge Blake found the officer's reliance on Mr. Digiovanni's clean car, his shirts hanging so that they wouldn't wrinkle, and his toiletry kit "suspect, because he offered no 'reasonable explanation' for relying on these factors."

Because the officer took longer than he needed to run the license and issue a warning ticket, and he had no reason he could point to for why he thought Mr. Digiovanni was suspicious, the permission that Mr. Digiovanni gave to search his care later was tainted by the officer's prior illegal detention. Thus, the evidence was suppressed.

The Fourth Circuit affirmed in United States v. Digiovanni.

* As it happens, he was right.

** Right. It doesn't really make sense.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 26, 2011

The Second Circuit Rocks Out On The Fourth Circuit's Love of The Third Level

Recently, the Fourth Circuit held that the government cannot deny someone who pleads guilty the third level for acceptance of responsibility under 3E1.1. Here's my earlier post on the Fourth Circuit opinion (which describes the issue in much more detail).

Today, the Second Circuit joined the Fourth Circuit's celebration of giving full sentence-reduction credit to people who plead guilty.

In United States v. Lee, the defendant, Mr. Lee entered a guilty plea and did it soon enough that they knew they wouldn't have to prepare for trial. The government refused to move for a third level reduction in Mr. Lee's sentencing guidelines under 3E1.1, though, because Mr. Lee had the temerity to disagree with the government about what happened in the crime.

He entered a guilty plea, but, apparently, did not fully submit to the will of the United States government, and so they had to have a sentencing hearing. The Second Circuit's opinion is not crystal clear on the government's reasoning, but, apparently, the government wanted Mr. Lee to spend more time in prison because either (1) he disagreed with the government, or (2) he made them do extra work.

The Second Circuit held that the government's refusal to move for the third level was unlawful. The court said that the government cannot withhold the third level simply because they have to prepare for a sentencing hearing, relying heavily on the Fourth Circuit's decision in Divens.

Let that 3E1.1 law keep developing in a way that gives people credit for giving away their rights in a guilty plea.

Hat tip to Professor Berman.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 26, 2011

The Fifth Circuit Affirms A Grant Of A New Trial In A Case Of Texas Family Backstabbing

No good comes from stealing a shotgun during a hurricane evacuation.

The people of Port Naches Texas had to leave their homes when Hurricane Gustav threatened. While they were away, homes were burgled. A shotgun and a rifle were stolen from a house.

Those weapons were later resold to a guy named Robert Newsom. They were sold by a white man who Newsom knew was a member of the Piazza family and a woman. The man was tattooed and bald. The woman said the guns used to belong to her father, but he died. Newsom paid $175 for the guns.

Newsom later heard about a burglary of some guns during the hurricane evacuation and became suspicious. He went to the police with his newly acquired guns. The police found the woman, Sandy Guilbreaux, who confessed. Sandy was married to Jed Piazza, but told the police that it was Jed's brother Chad who sold the weapons with her.

The police went after Chad. Newsome picked him out of a lineup that did not include Jed, though he noted that the guy in the picture had hair, and the guy he bought the guns from didn't.

Jed is bald. Chad is not.

Newsom's phone showed that he was called from Jed's phone to set up the gun sale.

The federal government took an interest in this case, and prosecuted Chad for selling the guns. Chad was convicted and sentenced to thirty-three months in prison.

The defense theory was that Ms. Guilbreaux was lying to protect her husband. Ms. Guilbreaux gave conflicting statements when she testified about how much hair Chad had, eventually settling on the idea that he had just shaved his head. She admitted that she had trouble remembering things because she had psychological issues and took prescription medicine that made her forgetful. She lied about being previously convicted for theft.

Chad and Jed's mother testified that Sandy told her that she was lying to the police about who she sold the gun with.

After the trial, Jed and Chad's brother Darrin came home from a time in prison. He had been home when the gun-selling happened and wrote an affidavit that he was with Chad during the time of the gun sale. On the night of the gun sale, Darrin swore that,

Around 9:00PM, my brother, Jed Piazza and his common law wife Sandy arrived in a blue colored sedan that looked like an old police car. Jed drove that type of vehicle during hurricane evacuations so he would not be stopped by police. At this time, I was outside smoking cigarettes with one of my other brothers, Steve "Bubba" Piazza. Jed told Steve that he had some guns in the trunk of their car that they wanted to sell. Steve told Jed that he knew of a guy that purchased guns from him in the past but this buyer would not buy stolen guns. Upon hearing this, Sandy, Jed's common law wife, said that the guns were her father's. Jed then called this person's phone number he got from inside a spiral notebook Steve had of everyone's numbers. I believe this person's name is Robert Newsome [sic].

Chad's lawyer filed a motion for a new trial based on Darrin's statement. The district court granted it.

The government appealed, apparently wanting to make sure there was a circuit court opinion describing their decision to prosecute a case in federal court based on the testimony of the wife of the chief alternative suspect who suffers psychological problems, has a criminal history that she lied about, and told another witness that her husband committed the crime.

The Fifth Circuit affirmed the district court's decision to grant a new trial in United States v. Piazza.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 25, 2011

The Eight Circuit Holds That A Check Is Not A Machine Or A Device

Imagine that you know someone who committed a federal crime.* A friend, let's say. You want to be supportive, so you go to the sentencing hearing.

You walk into the federal courthouse and marvel at the mahogany and the marble. The courtroom is vast. At the hearing you will learn what will happen to your friend's future. Will he be sent to prison? If so, for how long? Will his wife have to sell their house?

At the hearing, what would you expect the lawyers and the judge to talk about? Certainly they'll talk about the crime and how that happened. The judge will want to know why the crime was committed before imposing sentence, you'd think. You can imagine that the lawyers and the judge will talk about whether your friend is otherwise a good person.

Instead, to use the issue presented in the Eighth Circuit's opinion in United States v. Butler, at a sentencing hearing in our federal

This is not a machine

courts, you would hear a lengthy discussion of whether the crime of passing a counterfeit check in person at a bank is an offense that is "originated solely by paper instrument" as the terms are used in 18 U.S.C. S 1029(e)(1) (Spoiler Alert - It isn't.)

Why would you have been treated to this conversation? Why does the amount of time a defendant will be away from his family and his community turn, in part, on this language game?

Because the federal sentencing guidelines says so. Congress created the United States Sentencing Commission, which, in turn, created the United States Sentencing Guidelines. The guidelines set a range for what a person's sentence should be for every federal crime (except some very minor misdemeanors).

After Booker, federal district judges are now able to disregard the sentencing guidelines, but the judge has to consider the guidelines, and wade through their many provision, and hear arguments about whether and how they apply, before they can be ignored. And the guidelines create a longer sentence if you create a means to make fake credit cards than if you create a means to make fake checks, to use the example in Butler.

The motivation for the crime, interestingly, has very little to do with the guidelines range. If the defendant stole a loaf of bread to feed his sister's child, he likely will receive no guidelines reduction. If he stole a loaf of bread and rendered it inedible, simply because he's a mean guy who didn't want someone else to eat, he would likely receive no increase in his recommended guidelines sentence.

The guidelines have made our federal sentencing hearings sound like tax audits. For much of these proceedings, they have bleached the morality out of the conversation, except to the extent that the moral system set up in the sentencing guidelines is in issue. Booker has made these hearings better, but, for the people coming to see them, they're still baroque lawyer games, more than meaningful conversations about how, as a society, we govern ourselves.

 

* It's easier than you might think to commit a federal crime. As the good conspirators Volokh have said "If you're reading this, you're probably a federal criminal". Part of the problem that causes overcriminalization is that anytime any issue hits the news, legislators look to score cheap political points and start looking to criminalize something - anything - so that they can get favorable TV coverage. Think of Caylee's law, but repeated in 535 small ways through 112 sessions of Congress.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 24, 2011

The Ninth Circuit On Child Support, Restitution, and Domestic Slavery

Zoraida Pena Canal was like any other live-in nanny, except she worked from 6 a.m. until 10 p.m., wasn't allowed to talk with anyone other than the family she worked for, her employer held her passport, and she wasn't paid for the two years she worked as a nanny.

Her employer, Mabelle Dann, was convicted at trial of document servitude in violation of 18 U.S.C. S 1592, forced labor charges in violation of 18 U.S.C. 1589, and immigration charges. She was sentenced to five years in prison.

As the Ninth Circuit's opinion in United States v Dann, by Judge Gertner of the District of Massachusetts, sitting by designation, starts:

The parties at trial and on appeal present two competing narratives. Dann contends that this case is a not unusual story of the relationship between two women, with all its ups and downs. As a divorced, single mother with three small children, Dann was desperate. She gave Pena Canal the opportunity to come to the United States, and she treated her as a family member. Dann took care of, housed, and fed Pena Canal, and wanted to pay her as soon as she had the chance. Dann hoped to give Pena Canal a room of her own but was unable to do so. The two women had their fights, as all family members do. After Pena Canal left Dann, she discovered that she could obtain a T-Visa and stay in the United States, as long as she testified against Dann. Pena Canal's testimony is tainted by her incentive to lie.

The government in turn portrays a woman who went to great lengths to violate immigration laws so that Pena Canal could work for her. She needed cheap -- or free -- labor, and this was her means of procuring it. Her behavior towards Pena Canal became worse and worse over time, culminating in Pena Canal's working without pay in slave-like conditions, fearful of what would happen if she were to leave.

Dann challenged both the fact of her conviction and the sentence. Both were upheld.

I won't spend much time on the facts, except to note one exchange in the trial testimony where Ms. Dann and Ms. Pena Canal were arguing over whether Ms. Pena Canal was a slave. She wasn't allowed to leave the house, talk to anyone else, and hadn't been paid. To my mind, if you're arguing with your unpaid employees over whether you're a slave holder, you probably are.

The case presents, though, a remarkable restitution issue.

Ms. Dann was ordered to pay significant restitution to Ms. Pena Canal for holding her in slavery and not paying her for two years.

Ms. Dann was owed back child-support from the father of her children. The district court held that this child support debt was properly disgorgeable to Ms. Pena Canal as restitution. The money had already been spent, and was payable to Ms. Dann, the court reasoned, so it is Ms. Dann's money, and is subject to the restitution order.

The Ninth Circuit disagreed. The appeals court held that because child support payments are always the property of the child, provided the child is not yet an adult, they can't be ordered disgorged from the parent in a restitution order.

That much seems reasonable -until you think about it. The child support was, in part, for services provided by Ms. Pena Canal. And Ms. Dann is going to spend five years in prison, where she most certainly won't be supporting the kids with the income that comes in from the back child support.

So, to recap, the State of California will collect the back child support through its child support enforcement mechanisms. The money will not go to Ms. Pena Canal, the woman who did the actual work of parenting. Instead, the child support will go to the woman who is unable to support the children, because she's in a federal prison for five years.

The court recognized this is more than a little odd, and that the district court's order including the child support arrearage in the restitution order does seem equitable. But the court determined that the law is clear,

under California law, a creditor (in this case a crime victim with a restitution order) is not entitled to accrued child support payments owed to a custodial parent of children who have not yet reached the age of majority.

This is a tricky problem. Someone is going to have to watch over and support those kids. Ms. Dann won't be in a position to do it while in prison. If she gets the child support arrearage, and uses it to support the kids while she's not able to, I suspect most people would be comfortable with that.

Though there's no guarantee that's how this will play out.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 24, 2011

The Sixth Circuit Reverses, Taking Care Not to Hurt The Feelings Of The District Court

How should we think about seeing a sentenced reversed? Is it a statement about the quality of the district court judge? To be sure, a United States district judge will not pop the champagne on hearing she's been reversed. But, ultimately, should we think that the appeals court is commenting on the ability of the district court judge when it sends the district court's work back for a do-over?

I tend to think we shouldn't. It appeals the Sixth Circuit disagrees with me in United States v. Priester. (For Sentencing Law & Policy coverage, go here.)

Mr. Priester entered a guilty plea to a number of drug charges, including crack distribution. His lawyer argued that the judge should reject the guidelines because they reflect a policy decision that crack cocaine is worse than powder cocaine. The district court judge, on the Sixth Circuit's reading of the transcript, said he didn't think he had the power to reject sentencing guidelines.

As it happens, the district judge was wrong. After the sentencing, the U.S. Supreme Court held, in Spears v. United States, that a district court judge does have the authority to disagree with the decision reflected in the sentencing guidelines about how bad crack cocaine is.

In essence, the district court judge in Priester thought the law was one way. The Supreme Court later said it was another.

The Sixth Circuit goes out of its way to say just how awful it feels that the district court is being reversed here. The court starts the opinion by noting that "[i]n some cases we hold the district court to a standard we would dislike imposing on ourselves." The court later says that it is vacating Priester's sentence "on the admittedly unfair ground of insufficient clairvoyance."

Is there any argument that fairness to the district court is a proper ground to consider in a decision?

One can appreciate the social dynamics at play in a reversal - circuit court judges see district court judges in a number of fora. The circuit court wants to send a message to the district court that the reversal is not a reflection on the district court's work or value as a judge. But surely that sentiment is better expressed in something published by Hallmark than in a federal reporter.

Of course, a lawyer does not transform into a district judge by being sloppy about his or her work. A district judge is never going to want a court of appeals to say they got it wrong.

This Judge Does Not Like To Be Reversed

Yet courts of appeals do not exist to validate district judges. If anything, courts of appeals exist to give people a sense that a fresh, unbiased, triple set of eyes will look at each case. If the circuit court goes out of its way to assure the parties and the bar that its worried about how a reversal will effect the district court judge, as opposed to the man sentenced to fifteen years in prison, it threatens to undermine our collective confidence in these courts as that detached second look.

A contrary perspective, in a slightly different context, was recently given by Judge Reinhardt of the Ninth Circuit. As the ABA Journal put it, the Ninth Circuit "took another beating" by the Supreme Court last term. Judge Reinhardt was sanguine about his role in relation to that reversal rate,

"If anything, it's a compliment. I get treated like the others on the [Supreme] Court," he told the Los Angeles Times. "If you follow the law the way it is, before they change it, you're going to get reversed."

 

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 23, 2011

Every Published Defense Victory In a Federal Court of Appeals

As you may have noticed, this blog has a post on every published decision from a federal court of appeals that is a direct appeal from a criminal case and is a defense win.

A very good question is why this is useful.

There are already a lot of very good legal blogs. How Appealing is, of course, the gold standard in coverage of the goings on our nation's appeals courts. Sentencing Law & Policy is a tremendous resource for people who are interested in the latest developments on sentencing law and policy (it's very well-named). A loose coalition of federal public defenders run a set of blogs on criminal law developments in the circuits, aggregated at the D-Web Law Blogs site.

If you're looking for factual information about how the law develops, the blogs above, and many others, are already out there to help. Surely, by focusing only on cases where the defendant wins, a diligent reader will not leave with a representative view of the law or the country. The Ninth Circuit pops up more than, say, the Fourth. The majority of criminal appeals do not go well for the defendant who is appealing.

What's more, there are already a number of places on the internet to look for criminal defense commentary. Mark Bennett, Brian Tannebaum, and Scott Greenfield are the deans of this mode of blogging, though Not Guilty No Way, Grits for Breakfast, Jamison Koehler's blog, and Norm Pattis are reliably worth reading. If you're looking for the defense perspective, there's no shortage on the internet.

In light of what's already there, why post about every published defense victory in a federal criminal case?

I have three reasons:

First, because I'd like to post a little more in depth on each case, and that requires not writing about everything. I'd like to be able to write about cases so that my smart friends who aren't lawyers can understand what's happening, and whether it's something they agree with. The law shouldn't be inaccessible to nonlawyers -- at least not criminal law. By taking time with each case, I'm hoping I can write about the law in a way my mother, or yours, can understand. This is our government, putting people in cages. That's not always wrong, but it shouldn't be opaque.

Second, because it's a good way to canvass a number of areas of the law. Though the sample won't be random, it will be diverse. And diversity is fun and good. We'll touch on sentencing, on what counts as a crime, and on how the process of federal criminal law works.

Finally, I think this makes sense because criminal defense attorneys, especially ones who practice in federal court, need to be reminded that we do win. When I interviewed for a job with a federal public defender's office years ago, I was told that a lot of what the office did is "redefine victory." I get that. It matters if a client gets two years instead of eight as a result of a lawyer's smart work in negotiating a plea in exchange for sentencing concessions. Even with that success, the client is still going to prison. It's nice to see a court say "Reversed" when something bad happens to a client. This series celebrates that.

If you have questions or comments, send me an email or post here. Otherwise, enjoy!

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 22, 2011

The Eighth Circuit Reverses a Sentence, And Shows Why Relying On Criminal Conduct At Sentencing Without A Conviction Is Troublesome

It's a surprise to many people that when you go to sentencing in federal court, you aren't sentenced just for the conduct you were convicted of. Rather, there's no limit on what a federal judge can consider when it imposes sentence on someone.

For some kinds of sentencing considerations, that makes sense. If the person being sentenced spends every Saturday volunteering to help aged nuns, it's the kind of thing we all think the court should be able to take into consideration when imposing sentence.

Some categories of information are more troubling though. None is more troubling than a sentence based on other criminal conduct that was either not proven to a jury, or, worse, where a jury has already rejected the evidence.

Yet, in federal court, if a judge wants to consider evidence that didn't persuade a jury of guilt, the judge can do that. I think it's troubling for how we view jury service, and it's troubling as a matter of being fair to people charged with a crime. Nonetheless, it happens.

One problem with relying on other criminal conduct that wasn't submitted to a jury is that the vetting of the facts is less stringent. United States v. McLain shows why.

McLain ran a staffing agency. He employed a staff of nurses. He classified them as independent contractors instead of employees, and didn't pay or account for employment taxes. Willfully failing to pay or account for one's tax obligations violates 26 U.S.C. S 7202. Mr. McLain was sentenced to 48 months in prison.

The Eighth Circuit rejected his arguments that the district court misconstrued section 7202. To be sure, it is an unusually aggressive move to bring a tax prosecution for wrongly classifying people as independent contractors when they are employees. Much of the government's proof here, it appears, turned on a question of state regulation of nurses.

At sentencing, the court included in its calculation of tax loss, which, in turn, drove the guidelines calculation, two tax deduction "gifts" to two other people. Basically, Mr. McLain told two people to take deductions that they were not entitled to. If they had taken his advice, it would have increased the amount of tax that would have been uncollected -- his sentence was increased based on this counterfactual tax loss.

The government argued that this advice violated 26 U.S.C. S 7206(2), which criminalizes helping someone else prepare file a false tax return. So, even though Mr. McLain wasn't charged with helping the two other people to prepare a false tax return, the court looked at the advice he gave them, and decided that was good enough.

The Eighth Circuit disagreed. The appeals court noticed that helping someone prepare a false tax return requires that the people actually prepare a false tax return. Because the sentencing court didn't look into whether false returns were ever filed, or make any kind of factual determination about a return ever being filed, McLain's sentence should not have been increased for helping someone file a false tax return.

Surely, had that gone to a jury, the government would have focused on that question more clearly. The court would have looked to make sure all the elements were met and prepared a cleaner record on whether McLain met all the elements of the crime he was sentenced for having committed.

Yet, by avoiding a jury, this scrutiny was avoided.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 21, 2011

People Really React To Threats Against President Obama

Earlier this week, as I pointed out here, the Ninth Circuit reversed a conviction against a man for making a number of statements about Barack Obama's race, and how he'd like to see then-candidate Obama shot.

Articles appeared in the San Fransisco Chronicle, The Los Angeles Times, and Wired.

Two very good pieces, from different perspectives, are at The Volokh Conspiracy, and the San Diego City Beat. The Volokh post spends a lot of time on the Supreme Court's decision in Watts, which, of course, is the case to read on the issue. The City Beat provides more context on how this kind of prosecution matters to politics. It was a lot like Judge Reinhardt's opening in the opinion, only talking more about the Tea Party of today than the mean words used against Abraham Lincoln.

And, of course, a massive hat tip to Howard Bashman for these links.

What I haven't seen, and I'm kind of surprised that I haven't seen it, is a discussion of Bagdasarian in light of the tragic shooting of Gabrielle Giffords. The court's holding likely means that the only remedies we have to cool our political rhetoric are outside of the criminal law -- which strikes me as not necessarily bad -- but I would have thought someone would complain loudly about that implication of the decision.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 21, 2011

The Seventh Circuit Puts Fast Track Disparity Arguments On A Slow Track, But Doesn't Derail Them Entirely

If you come to the United States from another country, and you aren't really here with permission (that is, you come in violation of U.S. Immigration law), and you're sent back to your home country, but then decide to come back to the United States, odds are you have committed the federal crime of illegal reentry. This is a violation of 8 U.S.C. S 1326(a). The crime is commonly called illegal reentry.

This crime gets committed a lot. And it gets prosecuted in any place where a person who has returned to the country after a prior deportation is discovered. Illegal reentry can be prosecuted in Texas, and it can be prosecuted in Iowa.

(though, as an aside, there's a much larger population of recent immigrants in Iowa than you might think. My hometown of Perry Iowa, for example now has a very good Mexican restaurant. Iowa is trying to respond to these new Iowans in what I think of as a characteristically kind and reasonable way.)

Border districts have many more illegal reentry cases than they can reasonably address. In order to encourage people to plead guilty quickly, so these courts can dispose of these cases, many federal prosecutors on the border set up "Fast Track" programs. Though these programs have now spread beyond the border - Nebraska has one, for example.

Fast Track programs let people get a much lower sentence if they plead guilty quickly, agree to a statement of facts offered by the government, and give up certain rights.

A Very Different Kind of Fast Track

Generally, Fast Track programs are only available to people caught along the border. Folks charged with illegal reentry in other parts of the country have cried foul. If you're caught in Maryland, which does not have a Fast Track program, why should you serve longer than if you're caught in Texas, simply because of a program to manage the court's docket. That doesn't seem like justice.

The federal law that governs sentencing factors, 18 U.S.C. S 3553, even tells judges, in subsection (a)(6), that they should avoid treating people accused of the same crime with the same criminal history differently.

How to handle this, though, is a massive problem. The Seventh Circuit has rolled-up its sleeves to work on it though, in three cases consolidated in its opinion in United States v. Ramirez. And, to be clear, Sentencing Law & Policy beat me to the punch. Check out Berman's coverage here.


The Seventh Circuit held that:

a defendant claiming entitlement to a lower sentence because of a perceived fast-track "disparity" must promptly plead guilty, agree to the factual basis proffered by the government, execute an enforceable waiver of specific rights before or during the plea colloquy, establish that he would receive a fast-track sentence in at least one district offering the program, and submit a thorough account of the likely imprisonment range in the districts where he is eligible, as well as a candid assessment of the number of programs for which he would not qualify. Unless the defendant complies with each of these steps, the sentencing court will be free to reject the argument without comment.

The court was troubled by how much other districts vary in the way they give a reduction for participation in a fast track program. To be sure, that's troubling, though I tend to think it's troubling more as a matter of national policy than of being too lenient to someone who is going to spend four years or so in one of our federal prisons.

If Nebraska gives two levels off of the sentencing guidelines, and Texas gives six, should a defendant in Illinois get two levels off or four under a disparity argument, if they meet all the requirements of both Texas and Nebraska? What should happen, of course, is that in Nebraska, defense counsel should start making Fast Track disparity arguments relative to Texas, so that, later, the Illinois case should look to Texas instead of Nebraska.

Which raises another interesting point - judicial districts vary by their adherence to the guidelines. Are those cognizable as a 3553(a)(6) argument? They should be, of course, but I could see how a defense lawyer would be skeptical to make it - the judge you're trying to convince is the same one you're saying is outside of the mainstream of harshness.

Back to Ramirez, the court did note that proving that any individual defendant should have been eligible for fast track, and how much, is complicated and will be difficult work. They are absolutely right about that.

The court affirmed the sentences in the case, but modified the sentence of one of the defendants to clarify that he is not required to participate in the Inmate Financial Responsibility Program. That is perhaps not the most significant defense win.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.