U.S. v. Luong, et al., No. 09-10265 (12-29-10) (Wallace with Thomas and Mills, Sr. D.J., C.D. Ill.).

This is a second appeal. The first appeal affirmed convictions, but remanded for resentencing because the sentencing was under a mandatory guidelines scheme. In this appeal, defendants, convicted and sentenced for robbing computer companies of computer chips at gunpoint, argue that their 924(c) convictions should really be sentenced as 924(o) convictions (conspiracy to use firearms) and also that the Hobbs Act conviction should result in only one 924(c) conviction and not multiple. Interesting argument, pens the 9th, but too late. Because the pertinent convictions were affirmed in the first appeal, and the remand's mandate was only for sentencing issues, there is not jurisdiction on these issues. As for the sentencing issue raised, the 9th affirmed the imposition of the mandatory consecutive sentences under 924(c).

U.S. v. Valverde, No. 09-10063 (12-27-10) (Reinhardt with Schroeder and Hawkins).

The 9th holds that the effective date of the retroactivity provision of SORNA is August 1, 2008, the date on which the provision fulfilled the requirements of APA and publication. An earlier date, February 28, 2007, for an interim rule, is not effective because the Attorney General's justifications, to refute uncertainty and for public safety, were not valid upon close examination. The case concerned the defendant who was a sex offender under California law. Released in January 2008, he moved to Missouri and failed to register. He was charged with a violation of SORNA. He argues that SORNA did not yet retroactively apply to him because the interim rule, issued on February 28, 2007, was invalid. Congress had delegated to the AG the determination of retroactivity. The AG had issued the interim rule for retroactivity, under the APA's exception clause, to supposedly deal with the uncertainty of retroactive application and to protect the public. The interim rule was not valid, held the 9th. First, the uncertainty was undermined by the delay in issuing any interim rules, and because this exception would threaten to swallow the interim rule permanently. There was no real issue of uncertainty. As for public safety, again there was a delay, and the defendant was covered by a myriad of other state registration requirements. The AG's decision was not supported and an abuse of discretion. This decision adds to the circuit split on this issue: the 4th, 7th, and 11th held that the AG's interim was valid; the 6th and now the 9th have held it was invalid.

Congratulations to Rachelle Barbour and David Porter of the FPD, E.D. Ca. (Sacramento).

McCullough v. Kane, No. 07-16049 (12-27-10)(B. Fletcher with Berzon; dissent by Rawlinson).

The 9th decides that the California governor's 2004 reversal of the petitioner's parole recommendation from the board violated due process. The petitioner had been convicted of second-degree murder (he smashed the skull of a man sleeping in a car and stole his money to buy drugs). In the years since, petitioner became a model prisoner and was rehabilitated. The governor's denial of parole, despite the board's recommendation, was because of the senselessness of the crime. The issue here revolves around whether the nature of the offense, by itself, is enough. The majority finds it is not. It relied upon a state supreme court decision that stressed that just looking at the crime's facts was insufficient, because the focus should be on future dangerousness, although the nature of the crime was part of the analysis. The majority discusses the inconsistencies in the state courts' opinions and analysis. Reliance upon the state's decision was not reasonable. There was, moreover, as established by the 9th, a liberty interest in the reasoned application of the parole decisions. In dissent, Rawlinson argues that the focus should be on federal precedent, which held that the state could look exclusively at the nature of the crime. The majority's riposte was that the state decision was subsequent to that precedent, and refined the test, which was used by the 9th in its en banc decision in finding a liberty interest.

U.S. v. Alvarez-Perez, No. 09-50334 (12-22-10) (Singleton, Sr. D.J., D. Alaska, with Kozinski and Wardlaw).

"Time," sang the Rolling Stones in 1964, "is on my side." "Yes it is," when it comes to the Speedy Trial Act (STA). Here, the defendant, charged with a 1326 illegal reentry, waived indictment, indicated a desire to proceed under the fast-track provisions, and agreed to proceed by Information. He plead "not guilty" and then set up a change of plea, only to change his mind. The government then indicted, with a different case number. The defendant again indicated a desire to plead guilty, only to again get cold feet. Setting the case for trial, the court used the arraignment date, and not the indictment date. The case was eventually tried, with counsel making a STA motion orally before trial. Counsel argued that the clock started running with the indictment, and that, by calculation and tolling, the time for trial was two days over. The motion was denied. On appeal, the government argues that the Indictment had a separate number and that the date ran from arraignment. Come on, holds the 9th, it is a case of form over substance, because the charges remained the same, and it is more akin to a re-indictment or superseding, which inherits the STA clock. The 9th agrees that the clock starts ticking after the Indictment was handed down. Although the defendant did not object to the trial date outside the STA time, it was not a waiver, because STA is mandatory. As to moving before trial, counsel did so orally, although a written motion is better practice. Moreover, this was not a case of estoppel; counsel did not invite error. Having found that time indeed was on Defendant's side, Defendant wants the dismissal with prejudice. To quote The Rolling Stones again, "Now you were saying that you want to be free...." Not so fast, holds the 9th. The test for prejudice requires a look at the offense (deemed serious because of the priors), that the violation be long (it was not), that there would be an impact on the administration of justice (this was not some sort of gaming by the prosecution, but a computational error), and that there was prejudice in the defense (hard to see). Thus, dismissal is without prejudice. "You'll come running back (I said so many times before)."

Congratulations to Bridget Kennedy, Federal Defenders of San Diego, for the win.

Pulido v. Hedgepeth, No. 05-15916 (12-21-10) (O'Scannlain and Goodwin; dissent by Thomas).

On a remand from the Supremes to see if an error in the jury instructions was prejudicial, the 9th held it was not. This is a murder case, where the petitioner got LWOP. Convicted of felony-murder and other offenses, he argued that the jury instructions, read together, impermissibly allowed him to be convicted of felony murder even if he had formed the intent to aid and abet the robbery after the victim had been murdered. Indeed, that was his defense at trial, where the jury deadlocked on some counts, and sent out scores of questions relating to felony murder and intent. The 9th discussed the meaning of prejudice and whether there was a "substantial and injurious effect or influence on the verdict" or whether the court has "grave doubt" as to whether there was an impact. Grave doubt is defined as the unusual circumstance where the court feels itself in a virtual equipoise as to the harmlessness. The instructions here were not so prejudicial, as in the majority's reading, the jury was questioning intent and not timing of actions. Dissenting, Thomas argues that a careful parsing of the jury questions indicate at least one juror that would have likely acquitted on felony murder because of the timing of involvement, and the subsequent intent. Thomas has grave doubt.

Case o' The Week: Auld Lang Syne -- Times Gone By, Speedy Trial Time and Alvarez-Perez

Auld Lang Syne - Times Gone By, and insufficient Speedy Trial Act exclusions. A great start to a New Year for Mr. Alvarez-Perez -- that is, until the Ninth decides to meddle with the prejudice inquiry before the case even made it back to the district court. United States v. Alvarez-Perez, 2010 WL 5175011 (9th Cir. Dec. 22, 20101), decision available here.

Players: Hard-fought case by AFD Bridget L. Kennedy of Federal Defenders of San Diego. Decision by Alaska D.J. Singleton.

Facts: Charged with illegal reentry, Alvarez-Perez agreed to proceed by Information and pursue a fast-track deal – and then he changed his mind. Id. at *1. He was indicted. Id. He noticed his intent to plead guilty – and then he changed his mind. Id. He again said he wanted to plead guilty – and then changed his mind. Id. Without defense objection, the district court set a trial date within the Speedy Trial Act (“STA”) period, if the clock started ticking on the date he was arraigned on the Indictment. Id. at *2.

Issue(s): “Francisco Alvarez-Perez (“Alvarez”) appeals his conviction of being a deported alien found in the United States in violation of 8 U.S.C. § 1326. Alvarez contends that his prosecution violated the Speedy Trial Act (“STA”) because the permitted 70-day period was exceeded.” Id. at *1.

Held: “In this case, Alvarez made his first appearance on the 8 U.S.C. § 1326 complaint on May 15, 2007, and the information was filed on June 12, 2007. Under the plain language of the STA, June 12, 2007, is the trigger date.” Id. at *2. “Nor do we see any reason to assign any significance to the fact that the earlier information and the subsequent indictment were assigned different case numbers. To credit the government's argument would be to elevate form over substance and violate the clear intent of Congress. Were we to uphold the government's theory, the government in every case could extend the STA's time limits by indicting, dismissing, and reindicting under new case numbers. Thus, June 12, 2007, the date the information was filed, is the trigger date for the STA.” Id (emphasis added). “Accordingly, the filing of the indictment on the same charge did not start a new clock for the purposes of the STA.” Id.

Of Note: The good news is that Judge Singleton brushes back the government’s attacks on this Speedy Trial error. First, Alvarez-Perez did not waive his challenge, even though he brought it at the eleventh hour, just before trial, in an oral motion. Id. at *5. Moreover, this wasn’t “invited error” – even though it was the defendant’s own tortuous path to trial that created the confusion about the dates. Id. at *6-*7.

The bad news? The Court sees this as one of those rare cases where prejudice can be determined on appeal, and finds that there was no prejudice here. Id. at *7. So while Alvarez-Perez won the battle, he lost the war: the case is remanded with instructions to dismiss the indictment without prejudice (in other words, another trial likely awaits). Id. at *7-*8.

How to Use: Judge Singleton seems to create a new rule for the Circuit: while exclusion for plea negotiations is not appropriate, a district court can exclude time “where the defendant notifies the court that negotiations have resulted in an agreement and, as a result, the court sets a change of plea hearing.” Id. at *3. In what is frankly a bit of legal fiction, the exclusion in this situation is “held to be excluded either under § 3161(h)(1)(G) because it is ‘delay resulting from consideration by the court of a proposed plea agreement’ or under 18 U.S.C. § 3161(h)(1)(D) as a ‘pretrial motion.’” Id. at *3.

Legal fiction or no, this is a handy new rule for defense counsel representing an “indecisive” client before a Speedy-Trial crazed district judge keen on setting a trial date. If the defense informs the court of a change of plea and sets a date for the plea, that time can be excluded – even absent an actual agreement.

For Further Reading: On the same day Alvarez-Perez was decided, the Senate confirmed a new Chair of the United States Sentencing Commission. On December 22, federal District Judge Patti Saris of Massachusetts was confirmed as the new Chair of the Commission. See article here. A Harvard Law grad, Judge Saris has a background in civil rights and was first appointed to the bench by President Clinton. Id. Here’s hoping that six years after Booker, Chair Saris gets real reform underway at the home of the “advisory” guidelines.



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Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org




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U.S. v. Newhoff, No. 09-30143 (12-16-10) (Kleinfeld with Tallman and Settle). The jury wants testimony read back. What's a court to do? Well, if the court decides to read back testimony, which is in its discretion, it had better admonish, admonish, and admonish the jury. And that admonishment should stress that all read backs can distort; that all the testimony will be read; that the transcript is not evidence; that the transcript does not reflect tone or demeanor; and that it should not be viewed in isolation. The read-back should be in open court, and the court should read. In this case, which concerned a prohibited felon with conflicting trial testimony as to whether he knew the gun was in a backpack, the jury asked for the officer's testimony to be read back. The court did, in open court, with counsel, but neglected to give an admonishment, all though he said he would. The 9th concludes he forgot, as did counsel (for which counsel was chided). The error was plain. See U.S. v. Richard, 504 F.3d 1109 (9th Cir. 2007). However, although accounts differed, and the verdict was renderd nine minutes after the read back, the error was harmless. The 9th also found that the sentence was reasonable and there was no error in the guidelines determination as to the gun being stolen, connected to a burglary, and that the defendant had escaped from jail while awaiting sentencing in this case.

Case o' The Week: The Grinch Who Stole Remand - Newhoff and Jury Readbacks

The Ninth is Santa, gifting a defendant with a finding of plain error on a transcript readback before a Montana jury. United States v. Newhoff, 2010 WL 5128262 (9th Cir. Dec. 16, 2010), decision available here.

The Ninth is The Grinch, taking back its holiday gift with a finding that the error didn't affect Newhoff's "substantial rights," and refusing to remand for retrial. Id.

Players: Decision by Judge Kleinfeld.

Facts: The Montana Office of Tourism will not be linking to Newhoff on its web page. Newhoff was arrested while driving. Id. at *1. The officer who stopped the car said Newhoff passed something to a woman in the back seat. Id. A search of her purse revealed a small pistol. Id. Newhoff was tried federally of being a felon in possession and of possession of a stolen gun. Id. In a separate state case, he was convicted of burglarizing a trailer from which the gun was stolen. Id.

There was a charming cast of characters who testified in the federal trial: Newhoff’s “friends” testified that he had been trying to sell the pistol at “Deano’s casino.” Id. The woman in the back seat, though, conceded that she was drunk when her fiancé and Newhoff had robbed the trailer. Id. at *2. Her fiancé, by contrast, denied robbing the trailer, though he conceded that he had been “tweaking” on meth. Id. None of this motley crew were prosecuted for their various and sundry crimes, which “could suggest an inference that they lied about Newhoff to benefit themselves.” Id.

During deliberations the jury asked for a transcript of all the testimony, and then narrowed their request to one witness: Officer Cochran. Id. With the consent of counsel, the judge agreed to the reading of that one’s witness’s testimony and explained he would give a limiting admonition. Id. The transcript was read, the admonition wasn’t, and no one objected to that omission. Id. at *3. Newhoff was convicted. Id.

Issue(s): “Newhoff argues for a new trial on the ground that by reading back Officer Cochran’s testimony without admonishing the jury not to give it undue emphasis, the district court caused undue emphasis to be given.” Id. at *3.

Held: “[P]lainly the general rule is that if the jury wants a readback, and the court exercises its discretion to allow it, the court should make the jury hear the entirety of the witness’s testimony in open court (except where excessive length makes that impractical and fairness can be assured by using an excerpt preferably agreed upon by counsel), with counsel for both sides and the defendant present, and with an adequate admonition. . . . As to whether the error of reading back Officer Cochran’s testimony without an admonition was plain, we conclude that it was.” Id. at *4.

Of Note: As is too often the case, Newhoff won the error battle and lost the Olano plain error war. Id. at *5. Judge Kleinfeld’s analysis of whether this affected the defendant’s “substantial rights” is not particularly satisfying. After all, “the jury returned a verdict immediately after the readback.” Id. (emphasis added). Judge Kleinfeld assures us that there was no structural error on the case because the witness whose testimony was read back “provided the jury with the strongest evidence for the defense.” Id. And although the government’s witnesses were drunkards and tweakers, “their testimony was plausible and coherent enough so that they might have be believed.” Id. Newhoff – and the insurmountable hurdle of Olano plain error – is another reminder for trial counsel to object, object, object.

How to Use: Newhoff is a good primer on the procedure to be used for jury readbacks. Judge Kleinfeld provides a clean, concise catalog of five points that a readback admonition must cover:

1. that readbacks risk distorting the trial because of overemphasis on one witnesses’ testimony; 2. that both direct and cross examination of the witness will be heard; 3. that the transcript is not evidence – a jury must rely on its recollection of the testimony is; 4. a transcript does not reflect demeanor, tone of voice, and other aspects of credibility only found in live testimony; and 5. the testimony read cannot be considered in isolation, but must be considered in the context of all other testimony and exhibits.

Id. at *4. Keep this Newhoff list handy in the trial binder and make sure readback admonitions hit all these points.

For Further Reading: Judge Kleinfeld explains that Newhoff’s counsel made an “Occam’s razor” defense in closing argument. Id. at *2. The Razor posits, “‘Pluralitas non est ponenda sine neccesitate’ or ‘plurality should not be posited without necessity.’” See explanation here.

Put differently, the theory argues that the simplest explanation is the best – in this case, that the little pistol really belonged to the female passenger because it was in her purse (the simplest explanation for the event). Sadly, that razor doesn’t cut it in Montana.


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Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org

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Roberts v. Marshall, No. 08-55901 (12-13-10)(O'Scannlain with Gould and Ikuta). The 9th rules that a district court need not hold an evidentiary hearing regarding the petitioner's competency as to his ability to file a petition, or to avail himself of equitable tolling, when the record already is sufficient to make the determination. The petitioner pled to second-degree murder, and was sentenced to 15 years to life in June 2002. In November 2002, he began to challenge the conviction by raising IAC. The petitions continued over the next several years. On November 20, 2007, he filed a federal habeas alleging IAC, and attaching numerous mental health reports. The reports detailed mental health treatment and a regimen of psychotic medication to treat psychotic disorders. There were also reports of his mental health being good, fair, or within normal limits. Because the filing was outside by the AEDPA statute of limitations by several years, the petitioner argued for equitable tolling due to mental incompetence and asked for an evidentiary hearing. The allegation of incompetency so as to toll AEDPA usually gets a hearing. Not here. The district court denied equitable tolling and the hearing, ruling that the records indicated periods when he was competent and able to file his petition. On appeal, the 9th affirmed the district court's denial of the hearing, holding that such a hearing was not required when there was sufficient evidence or record available to make a judgment as to competency. "Where the record is amply developed, and where it indicates that the petitioner's mental incompetence was not so severe as to cause the untimely filing of his habeas corpus petition, a district court is not obligated to hold evidentiary hearings to further develop the factual record, notwithstanding a petitioner's allegations of mental incompetence." 19978.

U.S. v. Goyal, No. 08-10436 (12-10-10) (Clifton with Wallace; concurrence by Kozinski). The 9th enters judgments of acquittal on all counts of a securities fraud and false statements convictions. The case involved the chief financial officer of Network Associates Inc (formerly McAfee) who used accounting methods the government alleged were improper. The 9th found the principles not improper, statements not false, and that no reasonable jury could have found criminal liability for accounting practices that were widespread in the industry (such as quarter ending "buy in" deals to raise revenue projections). The opinion details the various practices in the industry and how the government over-reached. Kozinski, concurring, takes the government to task for bringing the case, destroying the defendant's life, and wondering if the government had better things to do.

U.S. v. Lawrence, No. 09-30285 (12-10-10) (Canby with Thompson and Berzon). The 9th affirms an ACCA conviction, finding that a prior Washington state conviction for second degree assault in violation of Washington Revised Code 9A.36.021(1)(a) qualifies as a violent felony. The second degree assault is a violent felony because it requires an intentional assault coupled with substantial bodily harm. Although the bodily harm may be caused by recklessness, the intentional aspect of the assault seals the categorical deal. The intentional assault aspect involves active force and requires a violent act.

Case o' The Week: Winning Battles, Losing Wars? Rivera-Gomez and Illegal Reentry Sentencing

Rivera-Gomez won the appellate battle, argues Judge Goodwin, but will lose the sentencing war on remand. United States v. Rivera-Gomez, 2010 Wl 4925446 (9th Cir. Dec. 6, 2010), decision available here.

Happily for Mr. Rivera-Gomez, the war isn't over yet -- and there's still plenty of sentencing ammo left.

Players: Victory for ED Cal Defender Dan Broderick and AFPD Douglas Beevers. Decision by Judge Ikuta joined by Judge Berzon, concurrence by Judge Goodwin.

Facts: Rivera-Gomez was deported, reentered, and was confronted by police in 2005. Id. at *1. He pushed a cop aside and escaped. Id. Two weeks later Rivera-Gomez was found in his home. He again tried to escape, this time by kicking a hole through the drywall and hanging from the ceiling rafters. Id. (Like that escape scene in “Matrix I” – though come to think of it, it didn’t work for Morpheus, either). Tear gas and a Taser were deployed, Rivera-Gomez was arrested, and was convicted of a state felony for resisting arrest. Id.

After he served three years in state prison, the feds hit him with a illegal reentry prosecution. Id. He pleaded guilty. Over defense objection, the district court “included his prior state sentence for resisting arrest as part of the criminal history calculation.” Id.

Issue(s): “Rivera-Gomez argued that the state resisting-arrest conviction could not be included in the criminal history calculation, because he resisted arrest with the intent of avoiding detection for his crime of illegal reentry. The district court rejected this argument, holding that the resisting-arrest conduct must be considered separately from the illegal reentry offense because the resisting arrest ‘creates an exceedingly dangerous situation that really compounds and aggravates the nature of the crimes that were initially under investigation.’” Id. at *3.

Held: “We disagree with the district court’s reasoning.” Id. at *3. “Although Rivera-Gomez’s resisting-arrest conduct occurred long after the reentry offense took place, nothing in the Guidelines establishes that conduct ceases to be relevant after a specified period of time. Therefore, if Rivera-Gomez resisted arrest in order to ‘avoid detection or responsibility’ for the illegal reentry offense (as he now claims), and there is no other basis for holding that the resisting-arrest offense is not relevant conduct to the crime of conviction, the district court erred in accounting for the conduct as a prior sentence, rather than as part of the offense level.” Id.

Of Note: As discussed in more detail below, Judge Goodwin’s view of the case on remand is – with all respect – incorrect. Id. at *6 (Goodwin, J., concurring). Lurking within his concurrence is an interesting, troubling, and bubbling issue in the Ninth: “harmless” error in sentencing. Id. (discussing Supreme Court’s harmless error rule in Williams). Judge Goodwin correctly observes that current law in the Ninth prevents the panel from merely affirming the sentence when there is “significant procedural error” – even if the panel suspects the resulting sentence would be the same. Id. He specifically refers to that recent, great Munoz-Camarena case, which rejected the “belts and suspenders” gimmick of immunizing an incorrect guideline sentence with a Section 3553(a) veneer. Id.; see also blog entry here.

In our view, however, there’s no conflict between Williams’ harmless guideline error, and rejecting the Section 3553(a) trick of protecting any sentence by slapping on an identical Booker term. This issue is a small part of a short concurrence, but expect Williams harmless error to arise in future Ninth cases soon.

How to Use: As mentioned above, Judge Goodwin incorrectly complains that Rivera-Gomez has bought himself a sentence twice, or three times, as high on remand by winning on appeal. Id. Judge Goodwin speculates that the defendant will now get hit with offense level adjustments that will dwarf the reduction he’s won in his criminal history category. Id.

Judge Goodwin does not explain, however, that the entire state term for resisting can (and should) be offset by a departure for lost opportunity to serve concurrent time. See United States v. Sanchez-Rodriguez, 161 F.3d 556, 563 (9th Cir. 1998) (en banc).

Moreover, as both the ED Cal counsel and SD Cal AFPDs have noted, that entire state term should be offset against the federal illegal reentry sentence under the complex scheme of USSG § 5G1.2. Keep that guideline handy when Rivera-Gomez starts mucking-up offense levels in federal cases that start as state “false identification” or “resisting” convictions.

For Further Reading: The only thing worse than the Dias Infaustus of the February Ressam decision is Judge Alarcon’s new order amending out valuable parts of that opinion. Compare blog here, with new order here. Dissenting Judge Fernandez is right that the panel got it wrong: Ressam should go en banc.


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Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org

Bills v. Clark, No. 08-17517 (12-8-10) (Tymkovich with Hawkins and Fisher). The 9th, in an opinion written by a 10th Circuit judge, importantly finds that mental impairment can justify equitable tolling. As the opinion states: "We conclude equitable tolling is permissible when a petitioner can show a mental impairment so severe that the petitioner was unable to personally either understand the need to timely file or prepare a habeas petition, and that impairment made it impossible under the circumstances to meet the filing requirements despite petitioner's diligence." The case arises from the state petitioner's untimely filing of his petition. Evidence presented showed an inability to read or write, neurological deficiencies, borderline to mild retardation, concurrent psychosis, and memory issues. Yet, he represented himself previously, filed some challenges, and could, in one court's reasoning, have relied on jailhouse lawyers. The 9th discusses the standard for competency, and the recognition of equitable tolling by the Supremes. It recognizes, and this is critical, that equitable tolling, like all equitable remedies, is very case- and fact-specific. The test here, as outlined above, is two-pronged. One, does the petitioner suffer from a mental impairment that caused him not to understand that he needed to file or prepare a habeas petition, and did that impairment make it impossible to meet the filing requirements under a totality of circumstances analysis? The 9th vacated and remanded for the court to reassess under this standard.

Moorman v. Schriro, No. 08-99035 (12-8-10) (Schroeder with McKeown and Rawlinson). In this capital case, the 9th affirms the district court's denial of the petition. This was a gruesome murder, in which the petitioner, on a furlough from state prison, met up with his adoptive mother, booked a motel room, and preceded to stab her, and then dismember her. Petitioner had a horrendous childhood, with allegations of sexual abuse by the adoptive mother, and he suffered from numerous mental issues. The petitioner alleged IAC in counsel's failure to raise on appeal trial counsel's decision not to ask for lesser included instructions (second degree or manslaughter), failure to argue impulsively as an alternative theory of defense, and failure to present more mitigation. The 9th found that the failure to ask for lessers was a strategic decision (factually so found by the state courts), that the alternative theory of impulse behavior was not a legal defense at the time, and that mitigation was presented, and a course would be hard pressed to find prejudice.

U.S. v. Caruto, No. 09-50309 (12-8-10) (Clifton with Bybee and Korman, Sr. D.J., ED NY). It is a rare decision that deals with the grand jury. Here is one. The defendant was convicted of drug offenses. The conviction was appealed, and reversed based on arguments made about defendant's omissions in her post-arrest statement. The defendant was retried, and convicted again. On appeal, the defendant argues that the instructions given to the grand jury were flawed. It seems that the court, in instructing the grand jury, went off script or misspoke during the instructions. In one instruction, the court stated that the grand jury must not concern itself with punishment whatsoever. The instruction earlier said "should not." The 9th found this inconsequential. The grand jury had been instructed with "should not." Another time, the court stated that the grand jury could not consider the wisdom of the laws, and made reference to the ballot box as an appropriate vehicle to do so. This was deemed harmless, and the 9th commented that the defendant, charged with importing over 34 kilos of drugs, was not exactly a sympathetic figure that the grand jury would have questioned the law's wisdom. At another time, the court stated that the grand jury was a branch of the U.S. Attorney's Office (editorial comment: true?). The court quickly corrected itself, and emphasized that the grand jury was not a part of the U.S. Attorney or a prosecutor, but independent. The 9th found that the court cleaned this up too, without prejudice. Finally, the court discussed probable cause and how a magistrate could have found it at the preliminary hearing. The 9th considered this attempt to explain a case's timeline a bit confusing, but found that it was cleared up with the court's correct admonishment that the grand jury had to determine probable cause and under what standard. The 9th also found that the grand jury voir dire was not required to be disclosed. The conviction was affirmed. The case does survey the role of the grand jury, with some horatory language about it standing between the government and malicious prosecution. It also deals with the protections given to the grand jury process and how a trial jury excuses almost all mistakes.

U.S. v. Lopez-Velasquez, No. 07-30241 (12-7-10) (en banc) (Callahan). The 9th, in an en banc opinion, sets out the duties of an Immigration Judge in informing an alien of the chances of relief. The line the 9th draws is that the IJ has a duty that is limited to informing the alien of a reasonable possibility that the alien is eligible for relief at the time of the hearing. There may be narrow exceptions when the IJ has the duty to inform the alien of relief for which he would be eligible given an imminent change in the law, but such circumstances are not presented here. This case arose because the defendant, facing immigration charges, argued that he should have been informed of the possibility that 212(c) relief might have been interpreted differently. The IJ is not supposed to be clairvoyant. As the opinion concludes: The IJ’s duty is to inform the alien of "a reasonable possibility that the petitioner may be eligible for relief." Moran-Enriquez, 884 F.2d at 423. This duty did not require the IJ to inform defendant of relief for which he was not then eligible and for which he would become eligible only with a change in law and the passage of eight months. Rather, an IJ’s duty is limited to informing an alien of a reasonable possibility that the alien is eligible for relief at the time of the hearing. Because defendant has not established that his deportation order was invalid, his motion to dismiss his § 1326 indictment was improperly granted. For the foregoing reasons, we reverse the district court’s order granting the motion to dismiss the indictment.

U.S. v. Rivera-Gomez, No. 08-10480 (12-6-10) (Ikuta with Berzon; concurrence by Goodwin). The 9th clarifies how to count relevant acts designed to further criminal conduct or evade detention in the context of 1326 cases (illegal re-entry). The defendant was here illegally and resisted being arrested (kicking through drywall and hanging from rafters). The state charged resisting arrest and sentenced him to three years. He then faced a 1326 charge. The district court counted the resisting arrest as criminal history. The defendant argued, and the 9th agreed, that it must be considered as relevant conduct, and any adjustments go into offense level. The acts were at the same time as the criminal conduct for which he is being charged. Goodwin concurs, but argues that the analysis of Carty of procedural error requiring a remand should be reconsidered for harmless error. He believes that the defendant here may well end up with a higher sentence.

This case provides a comprehensive and clear outline of how to calculate the guidelines in a 1326 case.

Congratulations to FPD Dan Broderick and AFPD Doug Breevers of the FPD office of the Eastern District of California.

U.S. v. Farmer, No. 09-50124 (12-6-10) (Bybee with Noonan and Clifton; concurrence by Bybee joined by Noonan). The 9th holds that defendant's prior conviction under California's statute against lewd and lascivious acts involving a child does count as a prior aggravated sex conviction under 2252 and required a 10-year mandatory minimum sentence. The 9th goes through an analysis of the categorical approach to this offense and how it should be given a common understanding meaning. The problem, and the reason for the concurrence, is that the 9th has two lines of cases concerning how to count prior convictions for sexual abuse of a minor offenses: those in the immigration context and those in the 2252 (computer) context. The concurrence argues that the 9th needs to clarify these cases, and argues that a common meaning approach should be used for prior sex offenses in the immigration context and reference to federal offenses and elements in the computer context.

Sarora v. Thomas, No. 10-35553 (12-6-10) (Tashima with Paez and Clifton). The 9th upholds the BOP's way of determining how and when inmates are sent to halfway houses to begin their reentry back to the community.

U.S. v. Milovanovic et al., No. 08-30381 (12-3-10) (Kleinfeld with Clifton; dissent by Fernandez). This appeal asks whether "honest services" fraud under the mail fraud statute requires a fiduciary relationship and economic harm to the victim. The majority answers "no." The case comes up on a dismissal of the indictment that alleged that the defendants, acting as state contracted certified interpreters for those taking commercial trucking license tests in Washington, cheated and bribed. The 9th crafts a five-part test (taken from Judge Raggi's concurrence in U.S. v. Rybicki, 354 F.3d 124 (2d Cir. 2003)) to test whether there is a special relationship between the person and the owner to whom the honest services should be rendered. The test looks to see if: (1) there is a legally enforceable right to have another provide honest services; (2) the deprivation of services requires them to be performed honestly (the example used is an employee sneaks off to a ballgame with a vendor, but the services are not questioned); (3) the defendant must intend to defraud; (4) the scheme must use fraud; and (5) the mail must be used to further the scheme. Using this test, honest services mail fraud does not require proof of a fiduciary relationship. The interpreters had a contractual relationship with the state that depended on honesty to protect important interests. The cheating and bribery undermined the expectation of the victim state, and placed at risk the licensing procedure. Moreover, the statute does not require damages to the money or property of the victim. Dissenting, Fernandez says that the indictment fails to plead sufficient facts to establish a responsibility to owe honest services, and hence no crime.

There is a split among the circuits on this. It calls for cert.

Addendum: This being a Fernandez opinion, it is typically sesquipedalian (given to or characterized by the use of long words). Examples include "facinorous" (extremely wicked) and "alembicat" (anything that refines or distills). Although such words can give one pause, especially as one looks them up, they do increase one's vocabulary stockpile when one needs that perfect description (even if no one else understands it). For instance, although not a synonym, one suggested alternative for "facinorous" to describe opponents is "dasypygal." Dasypygal means "having hairy buttocks." See www.thefreedictionary.com.

U.S. v. Bush, No. 09-30131 (12-3-10) (M. Smith with Thomas and Ezra, D.J., D. Hi). This is a fraud/Ponzi scheme where the defendant ended up with a 30-year sentence. The facts are the usual sordid greedy ones, promised investment returns with no risk (300% annually!), and the unusual ones, such as starting a resort in Baja named Cabo San Quintin (really) and employing for legal work an unlicensed and self proclaimed "ecclesiastical lawyer" who started an ethereal legal entity known as a "corporate soul." While the defendant portrayed himself as living an ascetic life, and acting as a mere conduit for charity, he purchased a huge estate of 20 acres and a house over 8,000 sq feet, with a golf course, basketball and tennis courts, and a fishing pond. There was a private masseuse, secretaries and assistants paid handsomely in cash, and off-shore accounts. Suites at Mariners and Seahawks games were leased. This ended badly, very badly (almost $40 million was invested). The defendant fled to (where else?) Paris and then to Poland. He was extradited and endured a two week trial on a wide range of fraud and money laundering charges.

On his appeal, he argued two issues. First, that U.S. v. Santos, 553 US 507 (2008) applied to transactional money laundering, and as such he could not be convicted for money-laundering the profits back into the criminal enterprise. Second, he argued error in not giving an "advice of counsel" instruction. On the Santos theory, the 9th does apply that analysis to 18 U.S.C. 1957 (transactional money laundering). However, his money laundering activities did not merge into the fraud as they did in Santos. That is, in Santos, the illegal lottery paid proceeds to winners, and was not money laundering. The decision, a plurality, distinguishes between proceeds that are needed to run the scheme, and profits that are taken out, and used elsewhere. Here, proceeds were distributed to several banks and not just used in the Ponzi scheme. Some funds were shuffled to avoid government detention, and sent overseas for other purposes. This case is a good overview of Santos and money-laundering precedents. As for the legal advice, the 9th found no basis for it. One lawyer was "up to his eyeballs" in fraud and the defendant did not rely on legal advice. Besides, the court gave a good-faith instruction.

Case o' The Week: Ninth Dodges Duty, Milovanovic and Honest Services Fraud

What do a Stradivarius, a Colt .45, a Louisville Slugger, and a Cuisinart have in common? They all describe a prosecutor's "true love" - the federal Mail Fraud statute, 18 USC Section 1341. See United States v. Milovanovic, 2010 WL 4910224, *3 & n.22 (9th Cir. Dec. 3, 2010) (decision available here).

That "true love" just deepened last week, as the Ninth broadened the already wide scope of "honest services" mail fraud by dodging a requirement of fiduciary duty. Id.

Players: Decision by Judge Kleinfeld, erudite dissent by Judge Fernandez.

Facts: According to an indictment, Milovanovic and his co-defendants had a scheme to get out-of-state Bosnians Washington State commercial driver’s licenses, through faked tests and falsified residency requirements. Id. at *1. None of the defendants were state employees, and their contracts said they weren’t “agents.” Id. They were independent contractors, and there “was no paperwork saying that any fiduciary duty pertained.” Id. They were charged with mail fraud under an “honest services” theory, and the district court dismissed the indictment “on the ground that the mail fraud statute required a fiduciary relationship.” Id.

Issue(s): “The briefs focus on an unsettled question in the Ninth Circuit: whether ‘honest services’ fraud under the mail fraud statute can be committed only by a ‘fiduciary.’ . . . . Defendants argue that . . a fiduciary relationship is a sine qua non of ‘honest services’ mail fraud.” Id. (footnote omitted).

Held: “Honest services mail fraud does not require proof of a fiduciary relationship. Nor does it require damages to the money or property of the victim.” Id. at *5.

Of Note: “[W]e are called upon to alembicate” Judge Fernandez’s dissent. Id. at *5 (Fernandez, J., dissenting) (to distill or refine to an essence). In a nutshell Judge Fernandez is no fan of Milovanovic’s “facinorous” behavior (extremely wicked). Id. at *7. Despite that hesitation, Judge Fernandez would uphold the district court’s dismissal of the indictment. Surveying the vast majority of cases involving honest services fraud, Judge Fernandez observes “a pattern requiring a fiduciary duty before an honest services mail fraud case can go forward.” Id. at *6. Moreover, he worries that absent this limitation “relatively innocuous conduct [could be] subject to criminal sanctions.” Id. at *5 (quotation and citation omitted).

Notably, Judge Fernandez’s dissents have a way of becoming Supreme Court opinions. See, e.g., Printz v. United States, 521 U.S. 898, 928 (1997). Indeed, Printz is an interesting example – there Judge Fernandez emphasized a respect for state rights and a distrust for federal overreaching that was ultimately embraced by the high Court. Like Printz, Milovanovic expands federal authority – in this case, by allowing AUSA to prosecute mere fraudulent misbehavior (with no fiduciary relationship). Let’s hope Milovanovic has the same fate as Printz, and earns Judge Fernandez another Supreme Court shout-out.

How to Use: As Judge Kleinfeld concedes, “The Supreme Court has not spoken on whether a fiduciary duty is a sine qua non of ‘honest services’ mail fraud. Our sister circuits have given varying and conflicting answers, so no decision we make can avoid a circuit split.” Id. at *2. Unsettled law, an important federal question, and a circuit chasm: this issue seems likely to be heading to the Supreme Court. Given that uncertainty, preserve this issue in mail fraud cases alleging “honest services” despite Milovanovic: this decision is unlikely to be last word on the requirement for a fiduciary relationship.

For Further Reading: What about Skilling, Black, and Weyhrauch - that recent trilogy of Supreme Court honest services cases that were supposed to be the last word on Section 1346 (honest services) prosecutions? See article here, summarizing decisions. Judge Kleinfeld barely references the cases, but does give a nod to Justice Scalia’s mocking of the “indeterminacy” of the term “fiduciary duty” in his Skilling concurence. See Skilling v. United States, 130 S. Ct. 2896, 2937-38 (2010) (Scalia, J., concurring). Justice Scalia scoffs at the "je ne sais quoi" that has been often required beyond a mere breach of fiduciary duty, id. at 2937, and the “grandiloquence” of “lofty” definitions of fiduciary duties for honest services fraud. Id. In short, when cert. is granted on Milovanovic at least one sharp-tongued Justice may be a tough sell on the requirement for a fiduciary duty to establish honest services fraud.


Image of violin from http://www.jerkasmarknad.com/stradivarius.html . Image of Colt 45 from http://www.rc-trucks.org/colt-45.htm Image of baseball bat from http://www.bigtimebats.com/catalog/?product=3669 . Image of a Cusinart from http://cuisinartdlc.com/


Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org