Case o' The Week: Ninth EDDifies Us on "Victims" - Herrera and Victims Under the Federal Sentencing Guidelines

 Corporations are “people,”

 

and government entities are, “victims.”

United States v. Herrera, 2020 WL 5405679 (9th Cir. Sept. 9, 2020), decision available here.

Players: Decision by Judge Hunsaker, joined by Judge Wardlaw and visiting Sixth Circuit Judge Cook.

Facts: Herrera pleaded open to mail fraud, relating to an unemployment-fraud scheme. Id. at *1. Herrera and his brother, and those who worked for the pair, filed fictitious claims. Id. The California Employment Development Department (“EDD”) paid out money on these fraudulent claims. Id. at *2. At sentencing, and over Herrera’s objection, his guidelines included a three-level bump for leadership role, and a two-level enhancement because there were ten ore more victims of the scheme. Id. at *2 (citing USSG § 2B1.1(b)(2)(A)(i)). Herrera was sentenced to 84 months and appealed.

Issue(s): “[ ] Herrera argues the district court erred by counting EDD as a victim for purposes of the number-of-victims enhancement imposed under § 2B1.1(b)(2)(A)(i). Whether the definition of ‘victim’ under § 2B1.1 includes a state government agency is a question of first impression in this circuit that we review de novo.” Id. at *4. “Thus, the question here is whether the definition of ‘victim’ for § 2B1.1, which does not include government entities in its list of various entities that may be counted as victims, must be interpreted to exclude government entities regardless of whether they suffer loss included in the loss calculation.” Id. at *6.

Held: “ [ ] [W]e hold that state government agencies who suffer losses that are included in the actual loss calculation under § 2B1.1(b)(1) are properly counted as victims for purposes of the number-of-victims enhancement in § 2B1.1(b)(2)(A)(i).” Id. at *8.

Of Note: This is a disappointing decision of first impression. Judge Hunsaker begins the analysis by reporting that “government entities” are not included in the list of entities that constitute “victims” in this guideline. Id. at *6. And she concedes that under “traditional statutory interpretation principles” “all omissions should be understood as exclusions.” Id. (emphasis added).

  And yet, relying on the “presumption of nonexclusive ‘include’” rule of statutory construction (from the Scalia / Garner Reading Law tome), the Ninth ends up concluding that a government entity is a victim under this guideline. Id. at *8.

  Sixty years ago, Professor Karl Llewellyn famously opined that rules of statutory construction are “conclusory explanations appended after the fact to justify results reached on other grounds.” See Karl N. Llewellyn, The Common Law Tradition: Deciding Appeals, 521-35 (Little, Brown, 1960).   Maybe they are, maybe they aren’t, but fair to observe that these rules don’t lead to a particularly obvious result in Herrera.  

How to Use: Herrera also tolerates the imposed leadership-role adjustment in an analysis that merits mulling. James Herrera, and a co-conspirator, Ayala-Mora, were both directed by “Hessiani,” Herrera’s brother. Id. at *4. And Hererra and Ayala-Mora both received equal proceeds from the scheme. Id. Herrera, however, still was hit by a three-level “leadership” bump. Co-equal conspirators are not supposed to get leadership enhancements: the Ninth’s factual discussion of why this three-level bump survives is worth a close read if you have a client who getting nailed with this guideline.                                      

For Further Reading: Senator Mitch McConnell has vowed he will push forward on the conformation of SCOTUS nominee Amy Coney Barrett, despite the recent spate of positive COVID results among Judiciary Committee members. See AP news article here. 

  Much ink has been spilled on Judge Barrett’s views on a woman’s right to choice, on the Second Amendment, and Obamacare. How does the jurist come down on criminal law issues? For an interesting piece on that important question, see Jacob Sullum, SCOTUS Contender Amy Coney Barrett’s Mixed Record in Criminal Cases, available here. 

 

 

 

Image of EDD from https://en.wikipedia.org/wiki/Employment_Development_Department

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

 

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