Case o' The Week: Hidden Dough a Ninth No-Go - Hernandez-Escobar and Due Process Rights in Forfeiture Proceedings

  Hiding money from a spouse? 

Avoid stashing it with a drug-dealing son.

  United States v. Hernandez-Escobar, 2018 WL 6693487 (9th Cir. Dec. 20, 2019), decision available here.

Players: Decision by Judge Fisher, joined by Judges Berzon and Watford.

Facts: Roberto Hernandez (“Roberto”) pleaded guilty to drug charges. In his plea agreement, he agreed to forfeit $73,000 in cash that was found in his bedroom, alongside thirteen pounds of meth, guns, and pay-owe sheets. Id.

  After the plea, Roberto’s father (“Mr. Hernandez”) filed a claim on that money. Id. Mr. Hernandez claimed it was his cash. Mr. Hernandez explained that he had stored the dough in shoeboxes, and stashed it with his son to protect it from his wife during marital difficulties. Id. at *2.

  Before the forfeiture hearing, the AUSA met with Roberto. When Roberto (generally) confirmed his father’s story, the AUSA reminded Roberto of his plea agreement, said he thought Roberto was lying, and warned of potential false statement charges. Id. Not surprisingly, Roberto then asserted the Fifth at his father's forfeiture hearing. Id.

  The district court found that the cash was drug proceeds, denied Mr. Hernandez’s “bailor” argument, and forfeited the funds. Id.

Issue(s): “[Mr. Hernandez] argues that he is a bailor whose title to the cash is superior to the Government’s, and also that his due process rights were violated because his son did not testify at the hearing.” Id. at *1.

Held: “We affirm.” Id. “In Alcaraz-Garcia, we ruled that for the purpose of calculating the time to appeal, a criminal forfeiture proceeding is civil in nature . . . We need not determine whether this reasoning in Alcaraz-Garcia extends to due process questions, because even if Mr. Hernandez was entitled to due process protections coextensive with those afforded to criminal defendants, he has not shown a violation.” Id. at *6 (internal quotations and citation omitted).

Of Note: The main holding of Hernandez-Escobar is a predictable affirmance of the factual findings of the district court. A far more interesting question is the due process rights of a third party seeking funds slated for forfeiture.

  As noted above, Judge Fisher skirts that question by holding that Mr. Hernandez (the father) suffered no due process violation in any event – the son was not (we are told) coerced into not testifying. This due process question remains an intriguing issue for another day.

How to Use: What happens when a prosecutor bullies a central defense witness into silence, by threatening perjury charges? Judge Fisher delves into that problem, in the context of the – "admonitions" – this prosecutor gave to the defendant (the father’s key witness). Id. at *7.

  Judge Fisher warns that, “In other circumstances, a prosecutor’s stated belief that a potential witness is lying might be an unnecessarily strong admonition, but not on these facts.” Id. at *6 (internal quotations and citation omitted).

  This discussion in Herandez-Escobar is worth a close read when dealing with a “dissuading” AUSA: on slightly different facts, the prosecutor here might have well crossed the line.

                                           

The Hon. United States Attorney David Anderson

For Further Reading: Trump-nominee David Anderson is officially the new United States Attorney for the Northern District of California. On January 2, 2019, Mr. Anderson was confirmed by voice vote in the Senate. See Congressional site here. 

  The Honorable Anderson takes the corner office in the midst of a long government shutdown, as federal investigators work without pay, AUSAs ask for delays of civil cases, and the Judiciary contemplates contingencies just to pay juror fees. See NYT article here. 

  Welcome back to the Federal Building, Dave.

Image of money in shoebox from https://news.dailytoast.com/blogs/after-60-years-of-marriage-a-man-finds-95-000-in-a-shoe-box-in-his-wi.

Image of the Hon. U.S Attorney David Anderson from https://www.sidley.com/en/people/a/anderson-dave.

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

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Case o' The Week: Ninth Rejects Gov't's Optical Illusion - Lorenzo v. Sessions, Cal H&S 11378 and Federal "Controlled Substances"

  For Alain Baxter, and for Elisio Atenia Lorenzo, isomers make all the difference.

Lorenzo v. Sessions, 2018 WL 4100360 (9th Cir. Aug. 29, 2018), decision available here.

British alpine skier Alain Baxter, disqualified because of a (legal) isomer of meth

Players: Decision by Judge Fisher, joined by C.J. Thomas and Judge Bea.

Facts: Lorenzo, a citizen of the Philippines, was convicted of possession of meth for sale in violation of Cal. Health and Safety Code § 11378. Id. at *2.

  Homeland Security initiated removal proceedings. Id. The removal relied on the characterization of Lorenzo’s priors as “relating to a controlled substance,” as defined (by cross-references) in the INA. Id. at *2.

   Lorenzo moved to terminate proceedings, arguing that the Cali definition of meth was broader than the Fed definition of “controlled substances,” because the federal Controlled Substance Act (“CSA”) included only optical isomers of methamphetamine. California’s definition included both optical and geometric isomers of methamphetamine. Id. at *3.

  The IJ rejected Lorenzo’s challenge, the BIA affirmed, Lorenzo appealed.

Issue(s): “We recognize that, in applying the first step in the categorical approach in this case, we have had to examine a disjunctive list within another disjunctive list. At the more general level, we must examine the disjunctive list of drug types – e.g., cocaine, heroin, methamphetamine – covered by California law. . . . At the more specific level, however, California law also includes disjunctive lists within a drug type, listing, for example, several types of methamphetamine – methamphetamine, its salts, its optical and geometric isomers, and salts of its isomers.” Id. at *7 (citation omitted).

Held: “Although we may not have expressly addressed this situation before, it is apparent that, when this situation arises, we must conduct a Taylor analysis with respect to both disjunctive lists.” Id.

  “We hold Lorenzo’s methamphetamine convictions under §§ 11378 and 11379(a) do not qualify as grounds for removal under 8 U.S.C. § 1227(a)(2)(B)(i).” Id. at *3.

  “In sum, California law demonstrates that optical and geometric isomers of methamphetamine are alternative means of committing a single controlled substance offense under California law. The government does not argue otherwise. The overly broad methamphetamine element, therefore, is not divisible. Because the California statute is overbroad and not divisible with respect to the overbroad element, we do not apply the modified categorical approach to determine whether Lorenzo’s convictions involved a type of methamphetamine covered by the CSA.” Id. at *8.

Of Note: This is a huge win for Benjamin Aiken and his Orrick colleagues, and the immigration bar is excited at prospects for relief. Lorenzo, however, has important ramifications for criminal defense as well. Most obviously, § 1326 clients with H&S § 11378 priors now have a challenge to their prior removals. 

  (And other opportunities beckon . . . .)

How to Use: If H&S § 11378 (meth) doesn’t qualify as a “controlled substance” for the INA, does it qualify as a “controlled substance” for the Guidelines (Career Offender, § 2K2.1, etc.), or for a § 851 federal prior?

    Nope (we think).

  In United States v. Leal-Vega, 680 F.3d1160, 1167 (9th Cir. 2012), Judge M. Smith explained that “controlled substances” in the Guidelines refer to the federal drug schedules (the Controlled Substance Act, or “CSA.”). That’s the very same CSA analyzed by Judge Fisher in Lorenzo. 
  Big red flag for clients with H&S § 11378 priors: they may not be Career Offenders, may have substantially lower felon-in-possession guidelines, and may not be “prior-able” under 21 USC § 851.   

                                               

For Further Reading: As Lorenzo illustrates, “categorical analysis” – huzzah!

  In a worrisome development, however, the Sentencing Commission is mulling whether to instead look at “actual conduct” for priors. See final notice here, Priority Three.

  Although Commissioners Barkow and Breyer both have reservations, see hearing video here, at 7:00 – 13:55, a Commission “examination” of the categorical analysis is nonetheless underway.

 Imagine the mischief we’ll make with mini-sentencing trials in federal court, bickering over decades-old evidence from dusty old state proceedings!  

Image of "old evidence" from https://www.youtube.com/watch?v=a2buTsEp13M 

Image of Alain Baxter from http://www.chm.bris.ac.uk/motm/methamphetamine/methh.htm

Steven Kalar, Federal Public Defender, Northern District of California. Website at www.ndcalfpd.org

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Case o' The Week: Ninth Reverses Convictions for Three Grizzly Deaths - Wallen and Good Faith Self-Defense

 The AUSA and MJ won’t like our subjective “good faith” self-defense theory after reversal and remand.

  (But they’ll have to grin and “bear” it).

United States v. Wallen, 2017 WL 4799292(9th Cir. Oct. 25, 2017), decision available here.

Players: Decision by Judge Fisher, joined by Judges O’Scannlain and Friedland. Admirable win by Assistant Defender John Rhodes, Federal Defenders of Montana.

Facts: Wallen lived in Montana. There are bears. Specifically, three grizzlies killed his chickens, ran near his kids, scared his wife, and returned repeatedly despite being chased off. Id. at *2. When the bears returned to the home for the third time in one day, Wallen killed them. Id.

  He gave different narratives of what happened to agents, and was charged with three misdemeanor counts of violating the Endangered Species Act. Id.

  At the bench trial, Wallen asserted he shot the bears in self-defense. Id. at *2. Id. The magistrate judge, as the factfinder, found Wallen’s claim of self-defense was objectively unreasonable and found him guilty. Id. at *3.

 Wallen appealed.

Issue(s): “Here, the parties dispute whether the ‘good faith belief’ standard an objectively reasonable belief, as the government argues, or requires only a subjective belief in the need to protect oneself or others, as Wallen maintains. The magistrate judge and district court applied an objective test.” Id. at *5.

Held: “We conclude that was error.” Id. “We now hold that subjective good faith belief suffices to establish self-defense under this statute.” Id. 

  “We . . . construe § 1540(b)(3) in accordance with the general principle that a good faith belief defense ordinarily depends on a defendant’s subject state of mind rather than the objective reasonableness of the defendant’s belief . . . .” Id. at *8.

Of Note: The Endangered Species Act provides a defense when the defendant kills an endangered animal, but had a “good faith belief he was acting to protect himself or herself” or others from bodily harm. Id. at *5 (quoting 16 U.S.C. § 1540(b)(3)). Judge Fisher concludes that the words “good faith” requires an analysis of the defendant’s subjective belief – not the (more difficult) “objective” reasonable person standard. Id. at *5-*6.

  “But wait,” you may ask, “doesn’t the vanilla federal assault statute require that more-difficult objective, ‘reasonable’ belief of danger to argue self-defense?”

  It does indeed.

  Judge Fisher observes that 18U.SC. § 113 (“Assaults within maritime and territorial jurisdiction”) only permits a self-defense theory when a defendant reasonably believes the force was necessary. Id. at *6, quoting United States v. Keiser, 57 F.3d 847, 851 (9th Cir. 1994). Shoot a grizzly and your sincere belief in the need for self-defense is enough. Assault a human, and a “reasonable,” objective belief in the need for self-defense is necessary.

   Weird? Blame Congress, explains this admirably honest opinion. Id. at *6. The two statutes are written differently: unlike the Endangered Species Act, the Section 113 assault statute has no “good faith” language. The Ninth is just calling ‘em like Congress writes ‘em.

How to Use: Fourth Amendment fans may get a little nervous with all this “subjective good faith” language that peppers Wallen. In a world where Leon and Jacobson give cops a “good faith” harbor, does Wallen mean that a cops who honestly – but unreasonably – believe a search was righteous escapes suppressesion?

  It does not. 

  Judge Fisher carefully distinguishes those other good faith cases, that arise in the context of the Fourth Amendment and § 1983 claims. A cop’s assertion of good faith for a search, and the government’s assertion of good faith in the context of the Stored Communications Act, still must be objectively reasonable. Id. at *7.

                                               

For Further Reading: Last summer, Senator Jeff Flake (R-Arizona) introduced a bill to split the Ninth– and held a hearing on the issue. See article here.  

 This week, Senator Flake famously explained he would not be seeking re-election – and added a bon mot or two with his announcement. See article here. 

  Impossible to predict the Split’s momentum, but safe to predict it won’t come be from a bill sponsored by Senator Flake.

Image from the Big Lebowski from https://i.pinimg.com/originals/98/cf/76/98cf7624015401cbfba1eb733640b428.jpg

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

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Case o' The Week: Never Made it to the Grand, But Throw Before Petit - Loftis, Uncharged Conduct, and FRE 404(b)

He’s making a list,

He’s checking it twice,

Now naughty’s admissible,

When fraudsters entice.

 United States v. Loftis, 2016 WL 7176657(9th Cir. Dec. 9, 2016), decision available here.

Left to right: The Hon. Judges Fisher, W. Fletcher, and N.R. Smith

Players:  Decision by Judge Fisher, joined by Judges W. Fletcher and N.R. Smith. Hard fought appeal by Montana AFPD John Rhodes.

Facts: Loftis is charged with wire fraud, for allegedly victimizing investors through falserepresentations. Id. at *1. Though the government posits a broad scheme, spanning six years and several states, charged transactions involved just three investors and all took place in Montana. Id.

  Before trial it became clear that the government intended to introduce evidence of crimes beyond the charged offenses. Loftis thus moved in limine for exclusion of uncharged conduct. Id.

  The district court granted the motion in part, finding some evidence excludable under FRE 404(b). While “[t]he extent to which the district court properly applied [the evidentiary] principles is not clear,” id. at *4, the court held that some evidence would be excluded under FRE 404(b) unless the government showed the uncharged conduct evidence was “inextricably intertwined” with the Montana scheme. Id. at *1.

  The government filed an interlocutory appeal; trial was stayed. Id.  

Issue(s): Did the district court properly exclude evidence of uncharged offenses, absent a showing from the government that the crimes were inextricably intertwined with the scheme employed in Montana?

Held: 1. FRE 404(b) and “other” acts: “We hold the evidence of uncharged transactions is not evidence of ‘other’ crimes or acts under Rule 404(b), because it is evidence of part of the crime charged in the indictment—the overall scheme to defraud.” Id. at *2 (emphasis in original, footnote omitted). ‘Because the evidence from other investors is charged conduct, the government is not required to rely on the inextricably intertwined doctrine to avoid Rule 404(b).” Id. at *4.

  2. “Inextricably intertwined:” “[However,] . . . even if the uncharged transactions at issue were not part of the crime charged, they would not be subject to exclusion under Rule 404(b) because they are ‘part of the same transaction’ as the charged transactions. The inextricably intertwined doctrine, therefore, affords a second basis for concluding the evidence should not be treated as ‘other’ crimes or ‘other’ acts evidence under Rule 404(b).” Id.

Of Note: While this is a disappointing outcome, Judge Fisher does take pains to emphasize why the evidence is admissible. Wire fraud’s first element requires the government to prove “the existence of a scheme to defraud.” Id. at *3. Hence, evidence from uncharged crimes is admissible as proof of that first element – it is not, by definition, “other crimes” and is not precluded under FRE 404(b). Id.

 This doesn’t mean that in a fraud case the government can throw everything at the barn to see what sticks – “these holdings apply only when the charged and uncharged transactions can fairly be characterized as parts of a single fraudulent scheme.” Id. at *4 (emphasis added).

  Put differently, when our creative clients have other, different scams running, those crimes fall outside of Loftis – they don’t bear on the first element of the charged wire (or mail) fraud.

How to Use: Fish gotta swim, birds gotta fly, AUSAs gotta overprove their case: it’s the nature of things.

  What are you supposed to do when a gung-ho prosecutor invokes Loftis and smuggles in a mountain of inflammatory junk to “prove” a fraudulent scheme (a scheme that is often painfully clear from the charged offenses?) Counter-invoke Judge Fisher’s explicit caveat: Loftis doesn’t address exclusion of this evidence on other bases, such as FRE 403. Id. at *4. (And remind the DJ that excluding cumulative evidence will shave weeks off an interminable fraud trial . . . .)  

                                               

For Further Reading: What about snitches running their own “uncharged conduct” schemes? Under Loftis, aren’t their shenanigans evidence of fraud crimes (and hence their motive for falsely incriminating your poor client to earn that 5K break?) For an interesting rift on this theme, see Jessica Broderick, Reverse 404(b) Evidence: Exploring Standards When Defendants Want to Introduce Other Bad Acts of Third Parties, at 79 U. Colo. L. Rev. 587 (2008), available here. 

Image of the Honorable Judges Fisher, W. Fletcher, and NR Smith (the Loftis panel) from http://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000010315

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

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Case o' The Week: The Sixth & the Ninth - Pimentel-Lopez, Jury "Drug Amount" Verdicts, and Guideline Sentences in Drug Cases

 Here’s a radical Sixth Amendment wish: respect the crucial role of juries, by constraining the guideline calcs of sentencing judges with the findings in a jury’s verdict.

  (Wish granted).

United States v. Pimentel-Lopez, No. 14-30210 (9th Cir. July 15, 2016), decision available here.

Honorable Judges W. Fletcher, Kozinski, and Fisher

 Players: Decision by Judge Kozinski, joined by Judges Fletcher and Fisher.  

Facts: Pimentel-Lopez was convicted of possession with intent and conspiracy to distribute meth. Id. at *3. The jury completed a form, provided with the consent of the parties, that attributed to Pimentel less than 50 grams of a substance containing a detectible amount of meth. Id. 

  At sentencing, the district judge found the actual quantity was over 4 kilos, with a guideline range of 235-293 months. The judge imposed 20 years. Id. at 5. Without the court’s “over 50 gram” determination, the guideline range would have been 63-78 months. Id.

Issue(s): “The jury in defendant’s criminal case made a special finding that the quantity of drugs involved was ‘less than 50 grams.’ We consider whether the district judge may nevertheless calculate defendant’s sentence based on the judge’s finding that the quantity involved was far in excess of 50 grams.” Id. at 3. 

  “The principal question presented is whether the district judge was entitled to make a drug quantity finding in excess of that found by the jury in its special verdict. The district court believed it was entitled to do so because ‘[t]here is no increase in the statutory maximum sentence beyond the 20 years or 240 months that is charged in the [i]ndictment.’” Id. at 5.

Held: “The jury found “beyond a reasonable doubt [that] the amount of [methamphetamine] attributable to Jesus Pimentel-Lopez [is] . . . [l]ess than 50 grams.” This is not a case where the jury failed to find a fact under the exacting standard applicable to criminal cases . . . . Where this happens, the district judge is free to find the same fact under a less stringent standard of proof. Id. Rather, what we have here is a case where the jury made an affirmative finding, under the highest standard of proof known to our law, that the amount of methamphetamine attributable to defendant is less than 50 grams. The district court cannot attribute more than that amount to defendant without contradicting the jury on a fact it found as a result of its deliberations. District judges have many powers, but contradicting juries as to findings of facts they have been asked to make is not among them.” Id. at 6 (internal citation omitted).

  “In our case, the jury was asked to find the upper limit of the quantity of illegal drugs involved in Pimentel-Lopez’s crimes, and it did just that: ‘[T]he amount of [methamphetamine] attributable to Jesus Pimentel-Lopez [is] . . . [l]ess than 50 grams.’ This was not a gratuitous finding added by the jury of its own accord . . . . The parties presented evidence on point and the jury was instructed that this was a permissible finding. In such circumstances, the finding is binding, no matter how inconvenient it may be in subsequent proceedings.” Id. at 7 (internal citation omitted).

Of Note: Judge Kozinski muses that it might have been a “blunder” for the government to agree to this “amount” verdict form. Id. at 10. If it was a blunder, it was an understandable one – the Ninth Circuit recommends an instruction nearly identical to the one given! See “9.16, Determining Amount of Controlled Substance,” available here. 

 

Ninth Cir. Model Criminal Jury Instruction 9.16

 Read Ninth Circuit Model Criminal Jury Instructions 9.15, 9.16, and Pimentel-Lopez together. If the government wants drug mand-mins, it appears to need the Ninth’s 9.16 “amount” jury form . . . but if the jury then finds a lower drug amount, the district court’s guideline calcs are later constrained by the jury’s findings.  

How to Use: A sentencing judge’s guideline calcs are constrained by the drug amounts found by the jury. Mull pages 9-10 of Pimentel-Lopez carefully, and that seems to be the inescapable holding. Ninth Instruction 9.16 and Pimentel-Lopez, together, may make it worthwhile to go to trial solely to seek a jury finding of a lower drug amount – a finding that will constrain a later guideline range. 

                                               

For Further Reading: Does this all seem a little . . . muddled? It is. This morass arises from the Ninth’s regrettable refusal to recognize that drug amounts and drug types are really just Apprendi elements of Section 841 and 846 offenses. See United States v. Buckland, 289 F.3d 558 (9th Cir. 2002) (en banc). 

 For a rational analysis of what should happen, if “writing on a clean slate,” consider Judge W. Fletcher’s concurrence in United States v. Jefferson, 791 F.3d 1013, 1019 (9th Cir. 2015), available here. 

  (And for extra credit, consider the logical extension of the Pimentel-Lopez's "jury-respect" principle to the damnable practice of using acquitted conduct at sentencing -- a practice lambasted by another notable Ninth Circuit Fletcher. See blog on United States v. Mercado, here.)

Image of the Honorable Judges Fletcher, Kozinski, and Fisher from https://www.youtube.com/watch?v=T0esCFRmhXY

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