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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Case o' The Week - The Gov't Was Right - Freddy Reyes and Relevant Conduct

  “Critics charge that relevant conduct, and specifically section (a)(2),

Hon. Judge Mary H. Murguia

encompasses too much unconvicted conduct, that sentences can be driven by unconvicted conduct, and as a result the full constitutional protections surrounding the criminal justice system, for practical purposes, are lost. These critics point out that there is no grand jury review of relevant conduct, no need to set out relevant conduct in a charging document, and lesser procedural or evidentiary protections surrounding its proof.”

    Discussion Paper, Relevant Conduct and Real Offense Sentencing, Sentencing Commission Staff, available here. 

   The critics are right. United States v. Freddy Reyes, 2014 WL 6600420 (9th Cir. Nov. 21, 2014), decision available here.

Players: Decision by Judge Murguia, joined by Judge Reinhardt and Fisher.

Facts: Reyes was part of a large smuggling ring: he ran the stash houses in the U.S.. Id. at *1. Undocumented aliens detained in one of these houses got a note out asking for help. Id. Raids by ICE then revealed two minors within. Id. at *2. Reyes pleaded guilty, pursuant to a Fed. R. Crim. Proc. 11(c)(1)(B) deal, to “harboring and concealing illegal aliens for financial gain.” Id. at *1. Probation busted the deal, and recommended that Reyes’ sentence be increased for harboring unaccompanied minor aliens. Id. at *2. The PSR recommended this enhancement under the relevant conduct guideline at USSG § 1B1.3(a), “which holds a defendant accountable for reasonably foreseeable actions or omissions of others committed in furtherance of a jointly undertaken criminal activity.” Id. at *3. At sentencing, both the defense and the government argued against the enhancements. Id. The court sided with Probation, rejected the deal’s (and the government’s) recommendations, and sentenced Reyes to the high-end of the enhanced guidelines: 96 months. Id.

Issue(s): 1. “Gamez Reyes does not dispute that unaccompanied minors were found at the . . . stash house. Instead, he disputes whether it was reasonably foreseeable to him that the unaccompanied minors would be there. In particular, he contends that, rather than applying the ‘reasonably foreseeable’ standard, the district court effectively applied a ‘strict liability’ standard, because it relied chiefly upon the sheer volume of aliens smuggled annually to conclude that it was reasonably foreseeable unaccompanied minors would also be smuggled.” Id. at *4.

Held: “We conclude that the district court applied the proper legal standard and did not clearly err in imposing the unaccompanied minor enhancement, despite the government’s argument at sentencing that it was not reasonably foreseeable to Gamez Reyes that unaccompanied minors would be smuggled.” Id. at *4 (emphasis added).

Of Note: The government was right: the district court’s rationale for imposing the unaccompanied minor enhancement is a stretch. There was no direct evidence that Reyes knew the two minors were travelling alone, or knew that was the practice of the conspiracy leaders to smuggle unoccupied kids. To its great credit, the government (properly) argued against the enhancement at sentencing. The Ninth nonetheless holds that it was “plausible” that Reyes “could reasonably have foreseen” that others “might” have smuggled unaccompanied kids, “by act or omission.” Id. at *5 (an impressive string of speculation). The Relevant Conduct guideline is overbroad and unjust, and is inconsistent with the broad sentencing principles of Apprendi and Booker. Thankfully, the “use of relevant conduct in offenses involving multiple participants” is a priority for the Sentencing Commission in its next cycle – here’s hoping we’ll see an amended § 1B1.3(a) in the New Year. See Commission Final Priorities here.  

How to Use: What is the standard of review for the district court’s application of the Guidelines to the facts? Who knows? Judge Murguia flags the intracircuit split on whether the proper standard of review is de novo, or for abuse of discretion. Id. at *3 (citing Tanke, 743 F.3d 1296, 1306 (9th Cir. 2014)). The panel in Reyes doesn’t try to reconcile the conflict, explaining that its decision would be the same under either standard of review. Which of the two standards of review should you argue on appeal? Depends on whether you’re attacking, or defending, a district court’s sentencing decision: as things currently stand, the S.O.R. is dealer’s choice.

   Note also footnote 6 of the opinion, where Judge Murguia deals with the government’s beef that the defense didn’t make certain legal arguments about the “unaccompanied minors” enhancement before the district court. Reyes, 2014 WL 6600420 at 3 & n. 6.  Not a waiver or forfeiture, explains the Court, “”We may consider new legal arguments raised by the parties relating to claims previously raised in litigation.” Id. (quoting Thompson v. Runnels, 705 F.3d 1089, 1098 (9th Cir. 2013)). A useful paragraph to fend off “plain error” claims by the government.

                                               

For Further Reading: The defense bar hates the expansive Relevant Conduct guideline. Turns out we’re in good company: the Sentencing Commission staff hates the guideline too! 

   For a very candid discussion of this “most troublesome” guideline, see the staff’s “Simplification Draft Paper” available here. 

Image of the Honorable Judge Murguia from http://www.washingtonpost.com/rf/image_606w/2010-2019/WashingtonPost/2013/02/22/National-Politics/Images/Bonds_Steroids_Appeal_Baseball_0de16.jpg

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

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Case o' The Week: Do The Right Thing - Mageno, Waiver, and Prosecutorial Misstatements During Closing Argument

 In Maloney, the government acknowledged error – but only during an en banc argument, and only when pinned down after a truly excruciating exchange with the Court.

   Far better, it appears, for the government to Do The Right Thing and flag error when it sees it. United States v. Mageno, 2014 WL 3893792 (9th Cir. Aug. 11, 2014), decision available here.

Players: Decision by Judge Berzon, joined by Judge Fisher. Dissent by Judge Wallace.

Hon. Marsha Berzon

Facts: Nancy Mageno’s godson dealt drugs, and Mageno translated for him. Id. at *1. A DEA agent heard her on a half-dozen calls, of suspicious nature – but not expressly mentioning meth. Id. at *1-*2. She testified at trial that she did not know her godson dealt drugs, and her godson testified on her behalf. Id. at *3. Over defense objection, the government was limited to one specific question of the godson regarding his prior deportation: he was asked if he was deported for trafficking meth. Id. at *4. From that sole question, the government argued (repeatedly) at closing that Nancy Mageno knew her godson had been previously deported for meth. Id. at *3-*4. No facts in evidence supported that argument. The defense did not object at trial or on appeal after Mageno was convicted. Id. at *4. The first flag was when the government raised this error in its appellate briefing. Id.

Issue(s): “[T]he government raises, as separate error, the prosecutors’ repeated misstatements during closing argument that [the godson] had testified to [the godson’s] deportation for dealing drugs. Mageno did not object to the government’s misstatement of [her godson’s] testimony at trial, did not raise this argument in her opening brief, and did not adopt it as a ground for reversal until oral argument. Should we consider the government’s error under these circumstances?” Id. at *4.

Held: “We conclude that we should.” Id.

Of Note: The ultimate holding – that the prosecutor’s arguments rose to plain error – is great. What is particularly interesting, however, is Judge Berzon’s thoughtful discussion of waiver. Over Judge Wallace’s dissent, Judge Berzon carefully works through the practical impact, and the historical background, of Rule 52. Id. at *5-*7. Waiver is an important appellate principle, and Mageno’s analysis is worth a careful defense read (particularly the Court’s emphasis on the nature of this criminal case, and the fact that a government representative erred). Id. at *7.

How to Use: To get to reversal, Judge Berzon must navigate the treacherous shoals of Olano plain error. She does so admirably, and the result is a very useful discussion regarding a prosecutor’s misstatements at closing argument. Id. at *7-*12. Of particular interest is the rejection of the general cautionary jury instructions as a “cure-all.” Id. at *9. Those instructions were never expressly tied to the misstatements, so did not vitiate the error. Id. Judge Berzon also rejects the government’s attempt to salvage the conviction by arguing the prosecutor did not intentionally misstate the evidence. Id. at *11. The prosecutor’s statements may not have been intentional misconduct, but they were “exceedingly reckless.” That, Judge Berzon explains, is enough. Id. at *12. Judge Berzon rightly ends the decision by commending the government for “bringing the missteps in this case to our attention,” but because “the government also created the problem” concludes the Court must “reverse Mageno’s conviction so that she may have an untainted shot at maintaining her innocence without the prosecution’s damaging misstatements.” Id. at *12.

                                               

For Further Reading: Seven years ago, the formidable Judge Betty Fletcher wrote a beautiful dissent attacking the use of acquitted conduct as relevant conduct at sentencing – using the Sixth Amendment as the foundation of her argument. See blog on Mercado here. 

  Is the Sentencing Commission finally coming around to Judge Fletcher’s view? In its official list of priorities, the Commission promises a multi-year effort to “simplify the operation of the guidelines,” including the examination of the “use of acquitted conduct in applying the guidelines.” See Notice here.  

   A spark of interest, worth fanning into a flame over the upcoming year. 

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Image of the Hon. Judge Marsha Berzon from http://www.brennancenter.org/sites/default/files/legacy/JordeSymposium65.jpg 

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

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