Case o' The Week: Win on Loss -- Galan and Disaggregating Restitution Loss for Child Porn Restitution

  [“T”]his area, in which Congress has adopted a scheme that at least approaches the limits of fair adjudication despite attempts by the courts to avoid caprice, cries out for congressional solution.”

  United States v. Galan, 2015 WL 6736535, *3 (9th Cir. Nov. 4, 2015) (three footnotes omitted), decision available here.

Players: Decision by Judge Fernandez, joined by Judges Tashima and Bea. Admirable win for D. Or. AFPD Bryan Lessley.

Facts: Eleven years before before Galan possessed and distributed child porn, someone else abused “Cindy” and created those images. Id. The government sought restitution from Galan under 18 USC § 2259(a), (b)(3). Id.

Galan contested the government’s calculations, because there was no attempt to disaggrate the losses arising from the original abuse from the losses arising from Galan’s crimes. Id.

The district court agreed with the government’s restitution calcs; this appeal followed.

Issue(s): “[Galan] asserts that the district court erred when it failed to disaggregate losses caused to Cindy due to the crimes perpetrated against her by the original abuser and those caused to her by others who possessed or distributed images of the abuse which were made by the original abuser.” Id. at *1. “The question on which the parties join issue is whether it is proper to make the restitution calculation without excluding the ongoing losses to Cindy due to the actions of the original abuser.” Id.

Held: “We agree and vacate the restitution order and remand.” Id. “We hold that in calculating the amount of restitution to be imposed upon a defendant who was convicted of distribution or possession of child pornography, the losses, including ongoing losses, caused by the original abuse of the victim should be disaggregated from the losses caused by the ongoing distribution and possession of images of that original abuse, to the extent possible. The district court erred when it declined to limit the restitution imposed upon Galan in that manner.” Id. at *3.

Of Note: In the first (brief) Westlaw page, Galan is peppered with no less than a whopping ten footnotes. It is a notable style of legal writing, that is not to everyone’s taste. See Abner J. Mikva, Goodbye to Footnotes, 56 U. Colo. L. Rev. 647 (1984-1985) (“I consider footnotes in judicial opinions an abomination.”) 

In defense of the approach, however, the first paragraph of Galan’s “Discussion” section lays out the core concepts in a series of clean and clear phrases, with the necessary and routine citations tucked away in a series of footnotes. 2015 WL 6736535, at *1.

An interesting opinion from footnote fan J. Ferdinand F. Fernandez.

How to Use: Back the case goes, to the district court. 

Now what? 

The Ninth “express[es] no opinion about what portion of a victim’s ongoing loss should be attributable to the original abuser.” Id. at *3. However, Judge Fernandez suggests some factors that are sure to be seized upon by district courts: egregiousness of the original abuse, how the victim deals with this abuse when distribution of the images does not follow, and the victim’s own reaction to the traumas to which he or she has been subjected. Id. at *3. 

“We have no illusion that the task will be easy,” commiserates Judge Fernandez, “but the courts (and the government) cannot decline to make an effort to accomplish what Congress and the Court have required.” Id. The restitution scheme “cries out for congressional solution,” opines the Court, id. but until then the district court and the government must try to disaggregate restitution claims.  

                                               

For Further Reading: A routine allocution and sentencing appeal from San Diego doesn’t merit enough interest to even get oral argument. Then, presto chango, a sua sponte en banc call goes out -- and the case is suddenly on January’s en banc calendar!?! 

What’s the bee in the Ninth’s bonnet? Speculation abounds, but hard to say for sure – the Ninth declined supplemental briefing on whether the case should go en banc. Curious and curiouser.

For Chief Judge Thomas’s order on this mystery wrapped in an enigma, see United States v. Francisco Gasca-Ruiz, No. 14-50342 (9th Cir. Nov. 12, 2015) (Ord.), available here.

Image of “footnote” By Calle Widmann (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons, from https://commons.wikimedia.org/wiki/File%3AFootnote.jpg

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

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Case o' The Week: Doe, a Discovery Dear - US v. John Doe, Affirmative Defenses, and Discovery

A visiting district judge on a three-judge panel rejects established Ninth precedent and shifts the burden of an affirmative defense onto the defendant.

(Albeit, with a little help from the Supremes . . . .) United States v. John Doe, 2013 WL 363016 (9th Cir. Jan. 31, 2013), decision available here.

Players: Decision by DJ William Smith, joined by Judges Fernandez and Berzon. Hard-fought case (and important discovery win) by ED Cal AFPD Carolyn Wiggin.

Facts: “John Doe,” a resident of Mexico, reached out to the FBI and tried to cooperate about drug cartels, to get his family to the States. Id. at *1. Meetings with an agent took place, though the agent disclaimed authorizing Doe to begin work. Id. at *2.

At the same time, a Fresno police detective investigated a case that – through Doe – netted twelve pounds of meth and five kg of cocaine. Id. at *2. When arrested, Doe immediately told the Fresno detective that he was working for the FBI. Id. The agent confirmed Doe was being “developed” as an informant but was not currently working for the FBI. Id.

Doe was charged federally. At trial he sought a “public authority” instruction that required the government to prove, beyond a reasonable doubt, that Doe did not believe he was acting as an informant. Id. at *3. Relying on the Supreme Court’s decision in Dixon v. United States, 548 U.S. 1 (2006), the district court denied the instruction. Doe was convicted. Id. at *3.

Issue(s): In Dixon, the Supreme Court held that “Congress intended the [defendant] to bear the burden of proving the defense of duress by a preponderance of the evidence.” Id. at *7 (citation omitted) (emphasis added). “The question of whether Dixon applied to affirmative defenses other than duress is a matter of first impression in the Ninth Circuit.” Id. at *7.  

Held: “[L]ike Dixon's duress defense, Doe's common-law affirmative defense of public authority must be proven by a preponderance of the evidence . . . .The district court was therefore correct in applying Dixon to Doe's public authority defense and requiring Doe, and not the government, to bear the burden of proof.” Id. at *8 (internal quotations and citations omitted).

Of Note: Doe does not stand for a “per se rule that the public authority defense must always be proven by the defendant by a preponderance of the evidence.” Id. at *9. The Ninth emphasizes that the question is statute- and case-specific. 

Here, the drug statutes at issue had a “knowingly” mens rea element that the public authority defense could not negate. The outcome might well be different for a specific intent crime. (Though this might be small solace – precious few federal crimes still have specific intent mens rea requirements, and how would public authority work in, for example, a federal assault case that requires specific intent? Maybe “attempt” crimes, with their specific intent mens rea, still give some hope for a Doe distinction).

How to Use: Something’s fishy with this agent. Phone records reveal that Doe called him on the eve of this big drug transaction, and Doe testified that he was working on the sale to help the FBI, yet the agent “didn’t remember” the phone conversation at trial. Before trial, Doe pushed for discovery of all information provided by Doe to the FBI, and all records of communications between Doe and the agent. Id. at *3. The district court denied the request as overbroad. Id. In a terrific discovery decision, the Ninth flatly reverses this ruling. Id. at *12. The Court explains that the discovery requests weren’t overbroad, counters that Doe couldn’t be expected to be more specific than he was in his request, and emphasizes (a la Stever) that evidence is relevant if it has “any tendency to make the existence” of a material fact more or less probable.” Id. at *13. Though not the primary holding, Doe’s discovery discussion is a hidden jewel worthy of heavy citation in discovery litigation.

                                               

For Further Reading: “Prosecutorial practices have contributed to disparities in federal sentencing.” So says the Sentencing Commission in its new Booker report. For a useful summary of the sure-to-be controversial tome, see Prof. Berman’s interesting post here.

Image of “Meet John Doe” movie poster from http://upload.wikimedia.org/wikipedia/commons/thumb/3/38/Poster_-_Meet_John_Doe_01.jpg/220px-Poster_-_Meet_John_Doe_01.jpg

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

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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