Case o' The Week: Till the Guidelines Do Us Part - Hymas and Burden of Proof at Sentencing

In a successful marriage, couples share everything.

(Except relevant conduct loss amounts). United States v. Hymas, 2014 WL 1319543 (9th Cir. Mar. 25, 2015), decision available here.

Players: Decision by Judge Clifton, joined by Judges M. Smith and Hurwitz.

Facts: Aaron and his wife Tiffany co-owned housing businesses. Id. at *1. They submitted fraudulent mortgage loan applications, and ultimately pled guilty to wire fraud. Id. Aaron was on some mortgage applications, Tiffany was on others. Id. 

   The PSR for Aaron tallied the loss at $3.6 million, and included lender loss amounts for dismissed counts. Id. That loss amount increased the guideline range by eighteen levels. Id. at *2. Aaron objected to the loss amount and the burden of proof: a three day evidentiary hearing followed. Id. The court rejected Aaron’s argument that the clear and convincing standard of proof should apply, and used the preponderance standard. Id. Using that standard, the court agreed with the PSR’s guideline calculation (though it ultimately imposed a sentence roughly half of the guideline range). Id.

Issue(s): “Aaron appeals his sentence of 24 months’ imprisonment, contending that facts found by the district court should have been subject to the clear and convincing standard of proof rather than the preponderance of the evidence standard that the district court applied, because of the disproportionate impact of those facts on the sentence that was imposed.” Id. at *1.

Held: “The sentence imposed by the district court was not entirely based on the loan that was the subject of conviction . . . . The district court also used losses from other loans to calculate Aaron’s total offense level, increasing the total offense level by an additional 8 levels. Based on the principles articulated above, the clear and convincing standard of proof should have been applied to determine the amount of the losses from the other loans.” Id. at *4. “Inclusion of the losses from the other loans ultimately resulted in an increase of 8 offense levels, from 10 (based on the loss from the Count Four loan by itself) to 18. This additional 8-level increase more than doubled the Guidelines imprisonment range. Under our precedents, we conclude that the district court should have employed a heightened clear and convincing standard of proof with regard to the losses from other loans.” Id. at *4.

Of Note: Aaron did not win on his challenge to his count of conviction. Id. at *3. Because those losses “stemmed from conduct for which Aaron was convicted,” it “alleviat[ed] the due process concerns discussed above.” Id. That’s a key point --Aaron did not plead guilty to the dismissed counts that bumped up his loss, and he did not plead guilty to conspiracy. Id. at *5. Judge Clifton distinguishes precedent that did not require “clear and convincing” evidence when defendants had a chance to fully contest conspiracy charges at trial. Id. 

  Fair to guess that if Aaron had pled guilty to conspiracy to commit wire fraud with his wife, the loss amounts for these other counts would have only required the lower preponderance standard. Beware of conspiracy, in fraud plea agreements. Admitting that apparently innocuous charge (compared to substantive wire fraud allegations) may ultimately cost you the valuable “clear and convincing” standard at sentencing.

How to Use: The government argued that the court’s decision to use the wrong standard was harmless, because the court ultimately varied down from 41 to 24 months. Id. at *5. Judge Clifton has none of it: in the Ninth, get the Guidelines right first “and use that recommendation as the ‘starting point and initial benchmark.” Id. at *6. The Court thus concludes the error wasn’t harmless, and remands the matter to district court. Id. Another useful case for the proposition that a below-Guideline sentence doesn’t immunize a district court from review: if the Guideline benchmark is wrong, even a sentence well below that benchmark can be taken up.

                                               

For Further Reading: Mandatory minimum sentences are a terrible idea. We know it, judges know it, and two Supreme Court Justices know it. Last week Justices Kennedy and Breyer told a House Appropriations Committee that “the idea of total incarceration just isn’t working.” See Wall Street Journal article here. 

Image of the split wedding cake from http://i.telegraph.co.uk/multimedia/archive/00647/news-graphics-2007-_647104a.jpg

Steven Kalar, Federal Public Defender N.D. Cal. Website at www.ndcalfpd.org

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United States v. Shaw, No. 13-50136 (Schroeder with Pregerson and Nguyen) ---

 

The Ninth Circuit affirmed a conviction for bank fraud under 18 U.S.C. § 1344(1), holding that the jury was properly instructed that a scheme "to defraud a financial institution" did not require the government to prove under that subsection that the defendant intended only to defraud the bank, not that the defendant also intended for the bank to suffer the financial loss as a result of the defendant's fraudulent conduct. Last year the Supreme Court held, in Loughrin v. United States, 134 S. Ct. 2384 (2014), that the two different subsections of § 1344 created two different crimes, and that subsection (2), which is not at issue in this case, did not require the government to prove either intent to defraud or intent to cause a financial loss on the part of the bank. But subsection (1) does require an intent to defraud by its very terms. Even so, Ninth Circuit precedent, including United States v. Wolfswinkel, 44 F.3d 782 (9th Cir. 1995), did not require proof of intent to cause the bank to suffer a financial loss. Nothing in Loughrin changed that precedent. Nor was the court persuaded by cases from other circuits that decided the issue the other way.

The decision is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/03/27/13-50136.pdf

　

United States v. Moe, No. 13-30244 (opinion by Clifton, concurring opinion by Hurwitz, M. Smith also on panel)

 

--- The Ninth Circuit affirmed a conviction for conspiracy to possess a controlled substance with intent to distribute, holding that the evidence was sufficient under the "buyer-seller rule" and that the district judge was not required to instruct the jury about that rule under the facts of this case.

The "buyer-seller rule" is an exception to the general principles of conspiracy liability. An agreement to sell drugs is, strictly speaking, a conspiracy, because it requires two people to agree to commit a crime. But because conspiracy requires an agreement to commit a crime other than the sale of the drugs, when the conspiracy involves only parties to the drug sale, the government must show that the buyer and seller had a criminal agreement that extended beyond the sale of the drugs between them. The court listed ten different factors that bear on the existence of an agreement beyond the sale of the drugs.

Here, the defendant lived in Helena, Montana, and her supplier lived in Spokane, Washington. She traveled to Spokane on seven occasions over the course of a year, bought half an ounce of methamphetamine each time, kept in frequent contact with her supplier, and even had a code for when supplies were low or the police were on to them. This evidence was sufficient to establish conspiracy, and thus the court rejected her challenge to the sufficiency of the evidence based on the buyer-seller rule. Moreover, under the particular circumstances of this case, the court concluded that the other jury instructions adequately conveyed to the jury the difference between a conspiracy and a mere buy-sale transaction, even as the court repeatedly stressed that the difference between the two was sometimes ineffable. A defendant is not entitled to have the jury instructed using particular words, after all.

Judge Hurwitz concurred, urging the court to follow the Seventh Circuit's rule of requiring a buyer-seller instruction in all cases.

The decision is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/03/27/13-30224.pdf

United States v. Haischer, No. 13-10392 (Clifton with Tashima and McKeown).

In a forceful and powerful decision, the 9th emphasizes that a defendant should be, and must be, given great latitude in mounting a defense. Here, the defendant in a wire fraud prosecution was precluded from arguing a duress defense. The defendant presented evidence that she was abused and even forced to sign loan papers before her boyfriend and codefendant would take her to a hospital to set her broken leg. The trial court basically forced her to either admit guilt if she wanted to argue duress, or to argue burden of proof and forgo the duress defense. This was error. A defendant can argue inconsistent defenses (duress and failure to meet the burden of proof for mens rea). Moreover, the preclusion of defense evidence under FRE 403 should be rarely used and implicates due process concerns. Clearly prejudice existed. The conviction was vacated and remanded.

A big win for former FPD Fanny Forsman of Nevada.

The decision is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/03/25/13-10392.pdf

United States v. Hymas, 13-30239 (Clifton with M. Smith and Hurwitz). 

 

The 9th tries to clear up the standard of proof when relevant conduct is used in sentencing. In this fraud case for a bad mortgage loan application, all sorts of other relevant conduct poured in to raise the offense levels under the Guidelines (and thus to increase the sentence). The 9th vacated the sentence, revisiting the factors to be considered and admitting that the precedent has not been "a model of clarity." Using factors set forth in United States v. Valencia, 222 F.2d 1173 (9th Cir. 2000), vacated and remanded in 532 U.S. 901 (2001), the 9th holds that a preponderance standard was appropriate for the one count to which the defendant plead guilty but that the relevant conduct from the other loans should have been proved by clear and convincing evidence. In Valensia, the 9th identified factors to consider: whether the statutory maximum for the offense in which the relevant conduct was applied was exceeded; whether the prosecution was relieved of its burden to prove guilt; whether a new offense was used or proved; whether conspiracy was used; whether using relevant conduct would result in an upward adjustment of 4 or more offense levels; and whether the Guidelines range doubled (or more). No one factor is determinative. (In a note, the 9th points out that though Valensia was vacated and remanded, the factors are still called by that case name). The focus here was on the four levels or more and doubling the sentence. The 9th found that clear and convincing should have been used.

This case will be well cited in our arguments. The case used a test that weighs the factors. It would seem that the factors we will tend to go with are the four or more levels, the doubling if sentence, and the existence of a conspiracy or the presence of codefendants, as they tend to come up more than others.

This is a significant sentencing case when it comes to relevant conduct.

The decision is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/03/25/13-30239.pdf

Medina v. Chappell, Nos. 09-99015, 09-99016 (Wardlaw with Thomas and Berzon) (Note: the Arizona FPD filed an amicus brief in this case) ---

 

In two consolidated appeals, the Ninth Circuit affirmed death sentences imposed on a California state prisoner. One of the appeals applied pre-AEDPA law; the other applied AEDPA's limitation on relief. The court also held that there was no error in failing to stay the proceedings in light of the Supreme Court's decision in Ryan v. Gonzales, 133 S. Ct. 696 (2013).

The primary issue in both cases was ineffective assistance of counsel at sentencing, for failing to present a host of mitigating evidence. That mitigating evidence, uncovered for the first time in federal habeas proceedings, was legion -- he was physically abused by his teachers at a Catholic school and by his parents. He suffered trauma during childbirth, head injuries at the age of 5 or 6, and was allowed to assemble model airplanes as a child in a manner that exposed him to toxic fumes. As a teenager, he was stuck by a car while riding his bicycle; his parents noted that he became more violent after that accident. He was diagnosed with paranoid schizophrenia on 11 separate occaisons during previons stints in prison in California and Arizona. These diagnoses were the culmination of a history of mental illness that began around the onset of puberty; as an adult, he experienced paranoid delusions. Four other members of his extended family may also have suffered from schizophrenia.

In the pre-AEDPA case, the court held that counsel's performance at sentencing was not deficient. Counsel's investigator interviewed family members and briefed counsel on the interviews, none of which divulged possible sources of the mitigating evidence that was later uncovered by federal habeas counsel. Because the investigation that trial counsel conducted revealed a childhood that was "relatively unremarkable," there was no deficient performance. Despite counsel's apparently good efforts, there simply were no "tantalizing indications" that counseled in favor of further investigation. Nor was the mitigating evidence "overwhelming," so as to give rise to Strickland prejudice for failing to present it, especially in light of the "litany of aggravating factors" that were presented at the penalty phase. And even though Gonzales gave the district court the discretion to stay the proceedings while the petitioner was incompetent to proceed, because his claims were record-based.

It should come as no surprise, then, that the case that is governed by AEDPA fared no better. No holding of the Supreme Court required trial counsel to affirmatively provide certain evidence to an expert witness, so there was no relief available for an ineffective-assistance claim based on that omission. And because his pre-AEDPA mitigation ineffective-assistance claim failed under de novo review, a parallel claim governed by AEDPA also failed.

The decision is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/03/26/09-99015.pdf

United States v. Marcia-Acosta, No. 13-10475 (Berzon with Fisher and Christen) ---

 

The heroine of the Descamps case comes to the rescue again. The Ninth Circuit vacated a sentence and remanded for resentencing, holding that a federal sentencing court, following Taylor v. United States, 495 U.S. 575 (1990), and Shepard v. United States, 544 U.S. 13 (2005), may not rely on defense counsel's characterization at a change-of-plea of the defendant's mental state to determine whether the defendant pleaded guilty to intentional assault, a "crime of violence" under Ariz. Rev. Stat. §§ 13-1203 and -1204.

The defendant was convicted of illegal reentry following a jury trial. He has a prior conviction for Arizona aggravated assault, see Ariz. Rev. Stat. §§ 13-1203 and -1204. At the state-court change-of-plea hearing on the aggravated assault charge, defense counsel provided the factual basis for the plea, explaining that the defendant "intentionally" hit the victim with a metal bar. Based on this admission, the federal sentencing judge imposed the 16-level enhancement under U.S.S.G. § 2L1.2(b)(1)(A)(ii) and imposed a 77-month sentence.

Arizona's assault statute, Ariz. Rev. Stat. § 13-1203, is categorically overbroad because it defines assault as involving intentional, knowing, or reckless conduct, while the generic definition does not encompass "ordinary" reckless conduct. See United States v. Esparza-Herrera, 557 F.3d 1019 (9th Cir. 2009). Arizona's statute is divisible, however, so the sentencing judge could look to some Shepard-compliant documents to see whether, under Descamps v. United States, 133 S. Ct. 2276 (2013), the defendant pleaded guilty to generic assault, which is a "crime of violence" for sentencing purposes here.

The state-court indictment and plea agreement tracked the language of the statute, so those documents didn't shed any light on what the defendant pleaded guilty to. The state-court plea colloquy here was the only place to turn for that. Under Shepard, the federal sentencing judge can't look at the state-court plea colloquy for purposes of assessing the factual basis of the plea, but whether the plea necessarily rested on the elements of the generic offense. But under Arizona law, the admission that the assault was intentional did not affect either the elements of the crime or the sentence imposed, so the defendant had no reason to contest defense counsel's characaterization of the conduct as intentional. If the case had gone to trial, the prosecution would have had to prove to a jury that the conduct was intentional. Only if the charging document or the plea agreement -- together with the factual basis for the plea -- indicate that the defendant admitted the elements of a generic offense may the federal sentencing judge conclude that the prior conviction is for generic assault. The panel thus remanded for resentencing without applying the 16-level enhancement.

The decision is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/03/23/13-10475.pdf

[Ed. note -- Thursday's decisions both involve procedural issues that arise in 28 U.S.C. § 2254 habeas cases.]

Curiel v. Miller, No. 11-56949 (O'Scannlain with Rawlinson and Bybee) ---

In another round of the battle over how to interpret the California Supreme Court's disposition of a state habeas petition, a panel of the Ninth Circuit affirmed the dismissal of a California state prisoner's § 2254 petition as untimely, holding that he was entitled to neither statutory nor equitable tolling. The superior court had dismissed his state habeas petition as "untimely and unmeritorious;" the California Court of Appeal denied his state habeas petition without comment; and the California Supreme Court denied it with "see" citations to In re Swain, 209 P.2d 793 (Cal. 1949), and People v. Duvall, 886 P.2d 1252 (Cal. 1995). A close reading of the pincites in the California Supreme Court's order told the panel nothing about the reasons for denying the petition, but the panel nevertheless concluded that the petitioner couldn't overcome the "strong presumption" under Yist v. Nunnemaker, 501 U.S. 797 (1991), that the California Supreme Court's decision rested on the same grounds as the superior court's. Because the superior-court petition was untimely, it wasn't "properly filed" under Pace v. DiGuglielmo, 544 U.S. 408 (2005), and so the petitioner didn't get statutory tolling. Nor did he get equitable tolling, because trial counsel sent him the trial transcipts six months before his federal petition was due.

The decision is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/03/19/11-56949.pdf

Daire v. Lattimore, No. 12-155667 (Benavides (5th Cir.) with Wardlaw and Clifton) ---

The Ninth Circuit affirmed the denial of a California state prisoner's § 2254 petition, holding that the California state court's didn't unreasonably deny the petitioner's claim of ineffective assistance of counsel in connection with an effort to mitigate the application of California's three-strikes law. Also, the panel questioned prior circuit precedent holding that Strickland v. Washington, 466 U.S. 668 (1984), isn't clearly established federal law under 28 U.S.C. § 2254(d)(1) outside the context of a capital sentencing hearing. 

Here's the opening paragraph of the opinion: "Sophia Dare is a 48-yaer-old woman who has, by all accounts, led a rather difficult life. Her personal history is an unfortunate tapestry of poverty, addiction, mental illness, and incarceration. Interwoven among these dark elements is a disturbing pattern of violence, with Daire having suffered repeated physical and sexual violence at the hands of friends, family members, and unknown assailants." The petitioner was convicted of burglary in a California state court; this was her third felony conviction, and so faced a mandatory 40-year sentence (and possibly more) under California's three-strikes law. At sentencing, counsel filed a motion under People v. Romero, 917 P.2d 628 (Cal. 1996), asking the court to disregard two of the prior convictions for purposes of sentencing, which would allow the court to impose a sentence of less than 10 years. Counsel was aware of the petitioner's bipolar disorder but didn't bring it to the court's attention. In state habeas proceedings, postconviction counsel argued that sentencing counsel was ineffective by failing to highlight and explain how bipolar disorder was manageable and treatable. The state habeas court denied the ineffective-assistance claim, reasoning that sentencing counsel had "properly represented" the petitioner at sentencing, presented "myriad mitigating factors" at sentencing, and that additional mental-health evidence wouldn't have moved the case into the category that was appropriate for relief under the Romero decision. The California appellate courts denied state habeas relief without comment. In federal court, the district judge concluded that presenting mental health evidence would have made a strong case for relief under Romero, but that AEDPA limited relief because the familiar two-part test of Strickland v. Washington, 466 U.S. 668 (1984), didn't constitute "clearly established federal law" for purposes of a sentencing hearing in a noncapital case. (Strickland was a capital case.)

This panel questioned the validity of prior Ninth Circuit decisions like Cooper-Smith v. Palmateer, 443 F.3d 1155 (9th Cir. 2006), in which the court said that there was no clearly established standard for effective assistance of counsel at a noncapital sentencing hearing. Ultimately, though, the panel affirmed because it was clear that the state courts reasonably concluded that sentencing counsel did not render ineffective assistance within the meaning of Strickland (?!?). The record was clear that sentencing counsel properly investigated the petitioner's background and concluded that evidence of her mental illness could be damaging to her case. Her treating physician explained that she was "too unstable to live in the community" and has a history of both violent conduct and abandoning treatment. Under Wong v. Belmontes, 558 U.S. 15, 20 (2009) (per curiam), introducing this mental-health evidence would thus have opened the door to additional aggravating (or at least non-mitigating) aspects of her background and mental illness. Thus the state courts could reasonably have concluded that sentencing counsel's omission was strategic. Moreover, because this was the petitioner's fourth felony conviction, counsel faced a heavy burden under Romero in persuading the judge to impose a sentence below the 40-year requirement. The nature of the petitioner's mental illness, the Ninth Circuit said, would not likely have called for leniency.

The decision is here:

http://cdn.ca9.uscourts.gov/datastore/opinions/2015/03/19/12-55667.pdf

Case o' The Week: New Blood for Youngblood - Zaragoza-Moreira and Trombetta (Lost Evidence) Issues

  Homeland Security has spent billions of dollars on high-tech surveillance, with cameras that can secure inculpatory video evidence to obtain federal convictions for border crimes.

   (A shame that they forget to add the button that preserves exculpatory evidence).

United States v. Zaragoza-Moreira, 2015 WL 1219535 (9th Cir. Mar. 18, 2015), decision available here.

Players: Decision by D.J. Gettleman, joined by Judges Reinhardt and Gould. Admirable victory for AFD Harini Raghupathi, Federal Defenders of San Diego, Inc.

Facts: Estefani Zaragoza-Moreira was shot in the head when she was 13, leaving her with severe cognitive problems. Id. at *1. Now an adult, Zaragoza was searched at the border and packages of drugs were found taped to her body. Id. In a recorded interview with an agent she explained that she had been pressured to bring the drugs by men in a cartel, who had threatened her family. Id. at *2. Zaragoza explained that she had tried to draw attention to herself and make herself obvious in the pedestrian line, by throwing her passport on the ground, trying to loosen the packages, and by being removed from the line by her drug-handlers. Id.; id. at *5. She explained that she was scared of the “dangerous” people and of the female handler who was in line with her. 

  The border pedestrian line is videotaped; five days after the complaint was filed the defense sent a letter to the AUSA seeking preservation of all video evidence. Id. at *2. Despite that letter, the border line video was destroyed roughly a month after the defense request. Id. at *3. Though HSI Agent Ashley Alvarado had interviewed the defendant, she made no attempt to preserve the video. Id. at *5. 

   Zaragoza moved to dismiss the indictment: when the motion was denied she entered a conditional plea.

Issue(s): “Zaragoza argues that the government’s failure to preserve the Port of Entry video footage from the morning of her arrest violated her due process right to present a complete defense.” Id. at *3.

Held: “[W]e conclude that the district court committed clear error by finding that the apparent exculpatory value of the . . . video was not known to Agent Alvarado and that the government, therefore, did not act in bad faith in failing to preserve the evidence. Because we have determined that Agent Alvarado knew of the potential usefulness of the video footage and acted in bad faith by failing to preserve it, Zarazoga’s due process rights were violated. We . . . reverse and remand . . . with directions to dismiss the indictment.” Id. at *8.

Of Note: Zaragoza is a seminal decision in the Trombetta / Youngblood line, and a must-read for “destroyed evidence” cases. In a thoughtful analysis, Judge Gettleman deconstructs the “apparent exculpatory,” “potentially useful,” and “bad faith” tests that weave through this line. Id. at *4-*5. He points out that the exculpatory value of the videos was readily apparent to Agent Alvarado. Id. at *5. He also rejects government claims that the destruction of the video was just reckless or negligent. Id. at *6. It was no defense for the government that Zaragoza could testify to duress: forcing her to do so by destroying the videos “runs afoul of Zaragoza’s Fifth Amendment right against self-incrimination.” Id. at *8. 

  Critically, the Court puts the AUSA squarely in the middle of the analysis, because the video was destroyed after the defense discovery letter was sent. Id. at *7. 

   Potent stuff, and the best “lost evidence” opinion in the Ninth since United States v. Silvilla, 714 F.3d 1168 (9th Cir. 2013); see blog here.

How to Use: Trumpet Zaragoza’s language on discovery obligations: “We reject this argument that plea negotiations somehow excused the AUSA’s lack of action following receipt of the [defense] letter [seeking preservation of the videos]. When discovery is requested by the defendant, as was the case here, plea negotiations should be based on full disclosure of the requested evidence . . .  Moreover, when the government fails to comply with preservation requests and allows evidence to be destroyed, it likely runs afoul of its discovery disclosure requirements under Fed.R.Crim.P 16.” Id. at *8 (emphasis added). 

   Simple language, profound import. A worthy introductory quote for discovery demand letters and discovery motions.

                                               

For Further Reading: Applications are open until April 17 for the ND Cal C.J.A. panels. Materials can be found on the Court’s website, or the FPD’s site here

Image of border surveillance from http://shannononeil.com/blog/read-of-the-week-sbinet-and-failed-border-technologies/

Steven Kalar, Federal Public Defender N.D. Cal. Website at www.ndcalfpd.org

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