Case o' The Week: Government Misses "Target" Yet Still Hits Ninth's Mark - Zhou, Restitution, and Standards of Review

   Q: What could be worse than a forfeiture order that snags assets from dismissed or acquitted counts? See Lo blog entry here.

   A: A restitution order that scoops in victims from conduct that is beyond the scope of the conviction. United States v. Zhou, 2016 WL 5390345 (9th Cir. Sept. 27, 2016), decision available here.

Players: Judge Graber writing and concurring, Judge Silverman concurring, dissent by Judge Tashima. Hard-fought appeal by CD Cal AFPD Jonathan Libby.

Hon. Judge Susan Graber

Facts: Zhou used fraudulent credit cards at Target (Colorado) and Nordstrom (California). Id. at *1. The indictment charged he used the cards in the Central District of California “and elsewhere.” Id. at *2. 

  He plead open and admitted the CD Cal (Nordstrom) allegations (discussed by the government during the plea). He didn’t admit to the “Target” allegations (not mentioned by the government in the plea). Id. at *1-*2, *5. 

   The court’s Mandatory Victim Restitution Act (“MVRA”) order covered both the Nordstrom and the Target charges. Id. at *1. The (not-admitted) Target offenses generated about half of the restitution sum. Id. at *2. Zhou did not object at sentencing. Id.

Issue(s): “Defendant . . . [argues] for the first time on appeal that the district court improperly ordered restitution with respect to the Target charges.” Id. at *1. “He argues that the district court erred by awarding restitution to persons who were not victims of the offense of conviction, because the offense of conviction covered only the Nordstrom charges and the MVRA authorizes restitution only to the victims of the offense. Defendant acknowledges, as he must, that he did not raise that argument (or any argument concerning restitution) to the district court.” Id. at *2. 

  “[Applying the MVRA], the only issue is whether the Target victims were persons ‘directly and proximately harmed as a result of the commission of’ Defendant’s crimes of conviction.’” Id. at *4 (citing 18 U.S.C. § 366A(a)(2). 

  “The parties dispute whether it was plain error to order restitution to the victims of the Target charges.” Id.

Held: “We hold that the district court did not plainly err in imposing restitution and, therefore, affirm.” Id. at *1 (emphasis added). 

  “Defendant pleaded guilty to Count One of the indictment, and restitution is therefore appropriate for all victims of that count.” Id. at *5.

Of Note: This is a disappointing (albeit limited) restitution holding. An important sub-issue, however, is the standard of review. The government urged the Ninth to punt, because the case involved an “unresolved factual issue.” Id. at *3. Judge Graber rejects that pitch, and relegates this (pro-government) line of law into regular old “plain error” review. Id. 

  She also, however, rejects Zhou’s plea for de novo review as a “pure question of law.” Id. at *3. Indeed, Judge Graber rejects this argument so vehemently that she concurs with herself, to advocate for en banc elimination of the “pure question of law” line altogether. Id. at *6 (Graber, J., concurring). 

  As Judge Tashima observes, it’s a curious concurrence, since no one views this appeal as a “pure question of law.” Id. at *10 & n. 3 (Tashima, J., dissenting). 

  Appellate folks, read this concurrence carefully: Judge Graber’s push for en banc review of an established and valuable line of jurisprudence is of concern. (And note that two of Zhou’s panel – Judges Tashima and Silverman – were on another panel that dealt with this line of law.). See blog here

How to Use: Can the government scrape by with a limited factual recitation at the plea, and then blow up the universe of restitution victims by importing what is really relevant conduct? 

  Not if you object. 

  Judge Graber makes a point of limiting Zhou’s holding: “we need not and do not decide definitively whether the district court erred, because any error was not plain.” Id. at *6. It is an open question whether it is error for non-admitted conduct (or, put differently, conduct that is not squarely within the scope of a conviction) to be the basis of a MVRA restitution order. 

  Want a blueprint for your restitution objection? Read Judge Tashima’s compelling dissent. He pointedly asks why the Ninth is upholding a restitution order based on what is really relevant conduct, when the MVRA only authorizes restitution that flows directly “from the specific conduct that is the basis of conviction.” Id. at *8 (Tashima, J., dissenting).

                                               

For Further Reading: Two decades of experience have confirmed what we predicted: Olano was, well, a plain error.

  For an explanation of why Rule 52(b) doesn’t work, and a thoughtful suggestion on how to reform our broken system of reviewing unpreserved error, see Dustin Berger, Moving Toward Law: Refocusing the Federal Courts Plain Error Doctrine in Criminal Cases, 67 U. Miami L. Rev. 521 (2013), available here.

Image of the Honorable Judge Susan Graber from https://pbs.twimg.com/media/B-lnfRyWsAArNqm.jpg

Image of "Target" symbol from https://lh3.googleusercontent.com/-vTEcOA0uj8Q/AAAAAAAAAAI/AAAAAAAACLc/3LScBF-Cpf4/s0-c-k-no-ns/photo.jpg 

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

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Case o' The Week: The Ninth Smokes Marijuana Argument - Nixon and the Scope of the Marijuana Rider to Appropriations Bill

Congress pays the Court to impose marijuana conditions on supervision.

Congress pays Probation to report marijuana violations of supervision.

Congress pays us to defend marijuana violations of supervision.

(But who has Congress paid to prosecute marijuana violations?)

  United States v. Nixon, 2016 WL 6068201 (9th Cir. Oct. 17, 2016), decision available here.

Players: Per curiam decision, by Judges Trott, Owens, and Friedland.

Facts: Nixon was sentenced to three years of probation for drug charges. Id. at *1. “As a condition of probation, the district court required that Nixon refrain from unlawful use of a controlled substance and submit to periodic drug testing.” Id. Congress then enacted a rider on an appropriation bill that prohibited the use of federal funds to “prevent States [that had enacted medical marijuana laws] from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” Id. Nixon moved the court to modify his conditions of probation, and permit him to use medical marijuana in compliance with California’s Compassionate Use Act. Id. The court denied the motion, concluding that the rider may have impacted DOJ – but had “no effect on the Court or the Probation office, which is an arm of the Court.” Id. Nixon appealed.

Issue(s): “[W]hether a congressional appropriations rider that prohibits [DOJ] from using certain funds to prosecute individuals for engaging in conduct permitted by state medical marijuana laws impacts the ability of a federal district court to restrict the use of medical marijuana as a condition of probation.” Id. at *1.

Held: “We hold that it does not.” Id. “Nixon’s reading is not supported by the plain language of the appropriations rider and is foreclosed by our precedent. On its face, the appropriations rider restricts only the DOJ’s ability to use certain funds on particular prosecutions during a specific fiscal year. See United States v. McIntosh, . . . 2016 WL 4363168, at *11 (9th Cir. Aug. 16, 2016) (observing that the restriction on DOJ’s use of the appropriated funds is ‘temporal’ in nature.) Accordingly, we have warned that individuals still face the possibility of prosecution under the CSA . . . . Accordingly, the district court did not abuse its discretion by refusing to modify the conditions of Nixon’s probation to allow him to possess and use marijuana for medical purposes in violation of federal law.” Id. at *2-*3.

Of Note: In August, we hailed Judge O’Scannlain’s McIntosh decision on medical marijuana as an admirable and honest interpretation of Congressional intent. See blog here. 

  One wondered, however, how McIntosh would affect conditions of supervision and pretrial release. Nixon (sort of) answers that question. 

  Yet . . . read the case closely. The Ninth only holds that it was not an abuse of discretion to refuse Nixon’s requested modification. Id. at *3. It does not hold that DOJ can prosecute these violations – see “How to Use” below for thoughts on that twist.     

How to Use: Assume your client on probation, or supervised release, or pretrial release, has a lawful cannabis card and pees dirty for pot. After Nixon, a court can legally hold a violation hearing. After Nixon, Probation or Pretrial can hand up Form 12s and Form 8s. However, Probation and Pretrial Officers don’t have bar cards. What attorney has been funded by Congress to prosecute marijuana violations of supervision? That thorny question is dodged here: Nixon didn’t raise it. See id. at *2 & n.2 (“We therefore need not decide whether the appropriations rider affects the DOJ’s ability to participate in post-sentencing proceedings.”) Moreover, if DOJ doesn’t participate and the Court anoints Probation or Pretrial (“arms of the court”) to “prosecute” the violation, other problems arise. See id. (declining to resolve any problems presented by the separation of powers doctrine).

   It’s the next big issue – after the appropriation rider, who, precisely, is paying for AUSAs to litigate these violations?  

                                               

For Further Reading: Richard Nixon and pot have a long and complicated history. 

  For a fascinating account of how our thirty-seventh President once smuggled the devil’s weed into the United States, see article here.

Image of President Nixon smelling marijuana from http://www.tokeofthetown.com/2011/06/june_17_marks_40th_anniversary_of_nixon_declaring.php/

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

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