A Weekly Summary of Snippets of Justice From the Federal Courts

Vol. 4, No. 32             As Published in the Advance Sheets on August 11, 1997             Copyright © 1997


 
Highlights of this Issue:
 

 


United States v. Studevent, 116 F.3d 1559 (D.C. Cir. 1997) (Judge Henderson)
United States v. Barnes, 117 F.3d 328 (7th Cir. 1997) (Judge Coffey)

In fraud cases under the Guidelines, the length of a defendant's sentence depends on the amount of the "loss" that was involved; and, as shown by these two cases, that term can often become a euphemism for "whatever the Government wants."

In the Studevent case the defendant was caught in a sting operation in which he succumbed to the entreaties of an FBI agent to steal a total of eleven blank checks from his employer.  The agent then told the defendant to whom to make out the checks and gave him a ballpark figure for the amount of each check.  The total amount filled in on all the checks was $535,592, for which the defendant received a total of $5,700 in compensation.  When it came time for sentencing, the court attributed to him a total of $535,592 in "losses" within the meaning of the Guidelines.

The defendant argued that a Government sting is a special case in which, despite the fact that actual loss is not possible, the Government can lure the target into committing himself into a vast amount of intended loss.  Thus, he argued that the "intended" loss should be limited to the loss that he realistically could have caused - a position that both the Sixth and the Tenth Circuits have adopted.  Under his theory, the loss calculations should not have included the checks he gave the FBI agent because there was no possibility that those checks would be deposited and because there was no evidence that the accounts on which the checks were drawn were even open or that they contained sufficient funds to cover the checks.

The D.C. Circuit did agree that, after ten years, "it is less than clear . . . that actual loss is a dominant principle under the Guidelines."  (Id., at 1563.)  However, it rejected the defendant's arguments and decided to follow the approach taken by the Fifth, Seventh and Ninth Circuits that "loss" under the Guidelines "is not limited to an amount that was possible or likely."  (Id.)  Thus, it concluded that a defendant need not have been capable of inflicting the intended loss for that amount to be properly chargeable under § 2F1.1 of the Guidelines.

In the Barnes case, the defendant was charged with unlawfully acquiring and redeeming food stamps.  Essentially, he purchased food stamps at $0.67 on the dollar and then disbursed two-thirds of the face value of all such coupons to their intended beneficiaries.  Thus, for purposes of sentencing, the Court was called upon to determine whether the "loss" in this case was the full value of the food stamps that were improperly redeemed, or whether the "loss" was limited to the 33% "commission" that the defendant actually received.  The difference was significant because the defendant argued that he should be sentenced based on a "loss" calculation of some $941,000; while the Government wanted him sentenced on the basis of a loss calculation of some $2,974,000 - which represented a two level difference in the sentence or approximately two years of additional prison time.

The Barnes Court acknowledged that it had never before been called upon "to determine the appropriate definition of ‘loss' in the context of a conviction under 7 U.S.C. § 2024."  Nevertheless, it reminded the defendant of two principles.  First, "the loss need not be determined with precision."  Second, "a court is not limited to making sentencing enhancements only for those losses incurred during the commission of the offense of conviction, but may also impose them for losses arising from ‘the same course of conduct or common scheme or plan as the offense of conviction'."  (Id., at 334).

Those two statements emphasize one of the many incongruities of the Guidelines.  On the one hand, the Sentencing Commission assured the world that: "[T]he guidelines [will] create a clear, definite expectation in respect to the sentence that a court will impose if a trial takes place.  In the event a prosecutor and defense attorney explore the possibility of a negotiated plea, they will no longer work in the dark."  (Guidelines Manual, Ch. 1 Pt. A , 4(c)).  On the other hand, "clear, definite expectations" of the sentence that will be imposed are sometimes inconsistent with the court's social perception of what the appropriate sentence should be - regardless of what the Guidelines might mandate.  For example, a reading of this case shows that what really bothered the Court was that it "speculated" that the defendant may have used some of the food stamps in question to sell "alcohol, drugs and the like."  (Id., at 335).  To deal with such speculative fears, the Court needed the type of facile flexibility that can only be achieved by adopting a thoroughly elastic definition of the word "loss" - and that's precisely what the Court did.

In affirming the sentence based on "losses" of $2,974,000, the Court wrote: "True, as Barnes suggests, the Food Stamp Program's intended recipients did receive sixty-seven percent of their benefits after he received his thirty-three percent ‘commission'.  What Barnes fails to recognize, however, is that his fraudulent scheme diverted a full one-hundred percent of the value of the food stamp coupons he purchased from their intended "use" - the purchase of specified food products from authorized dealers."  (Id., at 335).  That's a long way from "clear, definite expectations" of what the sentence will be.


United States v. Atkins, 116 F.3d 1566 (D.C. Cir. 1997) (Per Curiam)

This case addressed downward departures under U.S.S.G. § 5K2.13 based on a defendant's "diminished capacity" in the context of the provision of § 5K2.13 that states that such departures are permissible "provided that the defendant's criminal history does not indicate a need for incarceration to protect the public."

The defendant had been a Special Forces captain in Vietnam, a counter-terrorism consultant in Saudi Arabia and a mercenary with the Rhodesian army from which he developed a Rambo-type post-traumatic stress disorder that a psychologist described as a "survivor mode functioning" which "compelled" him to possess firearms.  Although he had "at least" four prior firearms convictions, he was arrested again on the charge of possession of a firearm by a felon; and he pled guilty.  His Guideline range for the newest charge was 37 to 46 months imprisonment; but District Judge Jackson granted the defendant a down ward departure based on "diminished capacity" and sentenced him to five years probation - following completion of a 96 month sentence for a previous charge that he had never served.  (It seems that the BOP had "mistakenly" released him upon the completion of a prior sentence.)

In granting the downward departure, Judge Jackson concluded that the defendant's criminal history did not warrant additional incarceration to protect the public for a number of reasons including the fact that his disorder was treatable; that the defendant would not be released from prison until he was in his middle 50's; and that he had never injured any law enforcement officers despite repeated opportunities to do so.

The Government, ever protective of its paramilitary operatives, was infuriated and appealed.  It argued that "criminal history" as defined in Chapter 4, Part A of the Guidelines is the only relevant factor in assessing whether a defendant poses a threat to public safety; and that, in any event, the district court had considered impermissible factors in deciding that the defendant's criminal history indicted no need for incarceration to protect the public.

The D.C. Circuit disagreed with the first argument.  It reasoned that the "different purposes behind section 5K2.13 and Chapter 4, Part A [of the Guidelines] suggest that the latter should not control the meaning of ‘criminal history' as used in the former."  (Id., at 1569).  Citing U.S. v. Cantu, 12 F.3d 1506, 1516 (9th Cir. 1993), the Court identified four additional factors that could properly be considered on this issue: namely, the psychiatric or other medical treatment the defendant is receiving and the likelihood of its success; the defendant's likely circumstances upon release; the defendant's overall criminal record; and the "nature and circumstances" of the current offense."  It also stated that "the purpose of [a § 5K2.13] departure is lenity"; and, using that premise, it concluded that the "criminal history" referred to in § 5K2.13 "is not limited to the meaning Chapter 4, Part A gives it."  (Id., at 1570).

The Court next addressed the Government's second argument; and it agreed that Judge Jackson had "strayed" from the permissible factors and had used a number of factors that had no relevance to the issue of a § 5K2.13 departure.  For example, it concluded that the defendant's age at the time of his release from prison was not a proper factor to be considered unless it could be established that aging would produce "a materially diminished inclination" to commit gun crimes; and it concluded that the amenability of the defendant's illness to treatment was irrelevant absent a finding that the defendant "would in fact receive (or even seek) treatment."  Thus, the Court vacated the sentence and remanded the case back to the district court for resentencing consistent with its opinion.


Swain v. Spinney, 117 F.3d 1 (1st Cir. 1997) (Judge Lynch)

This decision explores the boundaries of municipal liability in civil rights actions based on 43 U.S.C. § 1983 - an issue that is destined to take on increasing importance due to the explosive growth of claims based on police brutality.  For example, in the past five years alone, the City of New York has responded to some 2,100 police brutality claims by paying out more than $116 million dollars in settlements.  (See, Amnesty International's June 1996 Report on Police Brutality and Excessive Force in the New York City Police Department.)

The setting for this case was a charge of a vindictive, videotaped strip and visual body cavity search of a female detainee allegedly ordered by a police officer after she refused or was unable to implicate her boyfriend in certain crimes that the police officer wanted to hear about.  District Judge O'Toole originally dismissed the appellant's claim on the grounds that her degrading search was "within the bounds" of the Fourth Amendment; but on appeal the First Circuit reversed.  That Court concluded that there were no adequate grounds to justify the strip search in this case; that it was likely that the search had been used by the police officer "as a tool to humiliate and degrade [the appellant] in retaliation for her refusal to respond to interrogation"; and that the individual defendants could not assert a defense of qualified immunity because "qualified immunity does not protect ‘those who knowingly violate the law'."  (Id., at 10).  (For more on the revolting practice of strip searches, see the Quote of the Week below).

On the other hand, the Court also concluded that under prevailing law the Town of North Reading was not liable for any damages on a theory of failure to train properly its police officers.  The Court reviewed the Supreme Court's most recent pronouncement on § 1983 municipal liability jurisprudence - Board of the County Comm'rs v. Brown, 117 S.Ct. 1382, 1388 (1997) - which concluded that "it is not enough for a § 1983 plaintiff merely to identify conduct properly attributable to the municipality.  The plaintiff must also demonstrate that, through its deliberate conduct, the municipality was the ‘moving force' behind the injury alleged'."  The Brown case also addressed failure to train claims and concluded that "inadequate training" claims could be the basis for municipal liability only in "limited circumstances."  Here, because the appellant had not shown any prior incidents in which the North Reading police force had violated the rights of arrestees through strip searches, there was no "notice to the municipal decisionmaker" that anything was amiss - so it couldn't be held responsible for the actions of its police officers.


United States v. Mackey, 117 F.3d 24 (1st Cir. 1997) (Judge Boudin)

One of the most visible lopsided imbalances in the criminal justice system is a comparison of the unfettered freedom by which prosecutors can obtain their witnesses with the severely restricted circumstances under which defendants can obtain theirs.  Prosecutors have many weapons in their arsenal ranging from immunity, to promises of lenity, to tax-free cash payments, and more.  Conversely, defendants face enormous obstacles in their search for the truth.  Sometimes they can't locate witnesses the Government is hiding.  Sometimes their witnesses (or their families) are threatened with prosecution if they testify.  And sometimes the witnesses assert their Fifth Amendment rights not to testify, and the Government refuses to grant any immunity even if it has no intent to prosecute the witness for the crimes he might disclose.

As this case shows, witness immunity is a judicially-sanctioned one-sided affair.  Here, the defendant sought to explain that the money he spent was not the proceeds of a bank robbery, but rather was winnings he had accumulated from betting on baseball games.  His bookie, however, refused to testify, asserting his Fifth Amendment privilege against self-incrimination.  The prosecutor refused to grant the bookie any immunity, even though he "did not know of any pending investigations" against the bookie.  He said that "immunizing the testimony could undermine possible future prosecutions" of the bookie. (Id., at 27).  (Emphasis added.)

By statute, the power to confer witness immunity has been given to the prosecutor, not the judge (see, 18 U.S.C. § 6003); and the Court observed that "in general, courts have no power to compel immunity in the face of a good faith refusal by the prosecutor."  (Id., at 28).

In its decision, the Court referred to two frequently cited cases that explore the parameters of what constitutes "good faith refusals" by the prosecutor to grant immunity.  In U.S. v. Angiulo, 897 F.2d 1169 (1st Cir. 1990), the First Circuit (a) agreed that in certain extreme cases of prosecutorial misconduct, the Government's refusal to grant immunity could justify a court's refusal to allow the prosecution to proceed; and (b) suggested that the Government cannot withhold immunity solely in order to keep exculpatory evidence from the jury. And in U.S. v. Turkish, 623 F.2d 769 (2nd Cir. 1980), the Second Circuit explained why "judges have not shared the enthusiasm of student law review editors for creating a ‘right' of defendants to insist on immunity for defense witnesses."  (Id., at 27).


United States v. Jacobs, 117 F.3d 82 (2nd Cir. 1997) (Judge Cudahy)

As the Government increasingly seeks to attack defense counsel who represent defendants in drug cases, this case presents a timely analysis of the "crime-fraud exception" to the attorney-client privilege. The Court explained that the crime-fraud exception removes the attorney-client privilege from those attorney-client communications that are "relate[d] to client communications in furtherance of contemplated or ongoing criminal or fraudulent conduct."  (Id., at 87).  Citing U.S. v. Zolin, 491 U.S. 554, 563 (1989), the Court explained that: "It is the purpose of the crime-fraud exception to the attorney-client privilege to assure that the ‘seal of secrecy' between lawyer and client does not extend to communications ‘made for the purpose of getting advice for the commission of a fraud' or crime."

The decision also explains that a party seeking to invoke the crime-fraud exception must demonstrate that "there is a factual basis for a showing of probable cause to believe that a fraud or crime has been committed and that the communications in question were in furtherance of the fraud or crime.  This is a two-step process.  First, the proposed factual basis must . . . [constitute] a reasonable basis to suspect the perpetration of a crime or fraud, and that the communications were in furtherance thereof. . . . Second, [if the district court determines in an in camera review that those factors are present], . . . the district court exercises its discretion again to determine whether the facts are such that the exception applies."  (Id., at 87).


United States v. Grossman, 117 F.3d 255 (5th Cir. 1997) (Judge Parker)

This is as rare as it gets in Federal criminal cases these days.  Seven times the Fifth Circuit intoned that  the Government had failed to present any evidence that the defendant had committed any crime - and for that reason it reversed the defendant's conviction with the comment that "no criminality can be attached to [real estate purchasers] because the bottom dropped out of the real estate markets.  The decline of any market is part and parcel of the risks on investing."  (Id., at 261).

The defendant was convicted of one count of conspiracy to commit wire fraud and eleven counts of wire fraud stemming from various loans he received from a bank to purchase real estate.  The real estate investments ultimately turned sour and the loans were never repaid.  The Government's theory of criminal liability in this case was that the defendant had "either committed an inherently illegal act, or [had] lied and deceived [the bank] about some otherwise legal behavior, thereby inducing [the bank] to assume a risk it could have otherwise avoided."

The trouble with that theory was that the Government failed to prove it - despite the conviction.  The Fifth Circuit ruled, inter alia, that "the government did not prove that [the defendant] submitted false and fraudulent documents" to the bank; and that "the evidence [was] insufficient to support the mens rea element of conspiracy or wire fraud."  (Id.).  In the process of reaching those conclusions, the Court found, time and time again, that the allegedly illegal acts were nothing more than the products of people  "getting together and constructing a mutually beneficial bargain."


United States v. Rostoff, 966 F.Supp. 1275 (D.Mass. 1997) (Judge Young)

At first reading, this case presented Judge Young with the opportunity to present some rather intemperate views about how the Federal Debt Collection Act (18 U.S.C. § 3001 et seq.) should be utilized to perpetuate and enforce the collection of restitution orders issued in criminal cases - but, as will be seen, his comments went much deeper.

At issue were two restitution orders made by Judge Zobel in a bank fraud case.  When Judge Zobel originally ordered two brothers to make restitution "in an amount not to exceed $650,000 without interest", she advised the defendants as follows: "I'm sure counsel will explain to defendants that if at the end of probation there is no possibility of the [$650,000] being paid, then it will be remitted."  Those remarks - which Judge Young labeled  "infelicitous" and "ill-advised" - really incensed the Judge because, in his view, "Congress has . . . given the sentencing court (and the Probation Office) significant leverage to pressure a criminal defendant to disgorge assets - not just ill-gotten assets, but any assets, however obtained."  (Id., at 1278-79).  Thus, Judge Young used this case as an opportunity to rake Judge Zobel over the coals for failing to recover every cent possible; as well as to rip into Congress for failing to fund the Probation office with sufficient funds to carry out the huge task of policing the increasing numbers of felons required to serve terms of supervised release.

Perhaps the most intriguing facet this decision lies is a footnote at the end that presents some revealing statistics about the real costs of our nation's policy of incarcerating the highest percentage of citizens of any country in the world.  Those figures are significant because if there is ever to be any respite from the unending, vigilant hunt for new criminal defendants, it will come from a populace finally willing to address the issue of whether the real costs of our Criminal Justice System, in terms of the dollars spent and the liberties lost, are worth the price we pay.  Unfortunately, most of the real costs of our Criminal Justice System are cleverly buried deep within secret budgets or scattered throughout so many different agencies so that it is almost impossible to get a handle on the real sums that are being spent to achieve  justice in America.

We are told, for example, that the alleged cost of incarcerating prisoners at the Federal level is "only" some $20,000 per year; but we know that those figures are massaged.  They do not include the huge costs of constructing new prisons - which currently runs some $25 billion dollars per year nationwide.  We also know that those costs don't include the costs of financing the more than 20,000 separate Government law enforcement agencies that exist in our country; or the massive (and growing) costs of supervising the 4.2 million felons currently serving under some type of supervision after their release from prison; or the costs of the judicial system; or the costs of appointed counsel who now represent more than 80% of all criminal defendants in this country.  The astonishing nugget that Judge Young revealed in this case was that "Updated figures break down to an average of $9,795 per trial day for civil cases and $47,950 per trial day for criminal cases."  (Id., at 1288, n. 16, contd.) (Emphasis added).  Taking that statistic to its logical conclusion, if we assume that each of the approximately 2 million prisoners who populate our prisons and jails on any given day received only one day in a criminal court, the cost of all the criminal cases for all the presently incarcerated prisoners cost the American taxpayers a staggering $100 trillion - and that's only one component of the total costs of our criminal justice system!

It's no wonder that New York attorney Steven Donziger of New York, recently observed that: "Crime- fighting is a growth sector in the United States economy, consuming about $100 billion in tax dollars.  Over the last 20 years, spending on crime has increased at more than twice the rate of defense spend ing."  (See, The Washington Post, The Prison-Industrial Complex: What's Really Driving the Rush to Lock 'Em Up, March 17, 1996, page C3.)  It's just too bad that Donziger didn't have Judge Young's "updated figures" available to complete his calculations!


United States v. Gort-DiDonato, 967 F.Supp. 254 (W.D.Mich. 1997) (Judge Enslen)

What does a judge do when he gets reversed?  He gets angry!

When Judge Enslen first sentenced the defendant in this case, he imposed a two level enhancement pursuant to the provisions of U.S.S.G. § 3B1.1(c) on the grounds that the defendant had acted as an organizer, leader, manager, or supervisor of a criminal activity consisting of at least one participant but fewer than five participants.  On appeal, the Sixth Circuit vacated the sentence, holding that "the court neither addressed Application Note 2 [to § 3B1.1] nor made a finding of fact as to whether [the] defendant engaged in a supervisory, leadership, organizational, or managerial role over another participant in the scheme to defraud her parents."  (U.S. v. Gort-DiDonato, 109 F.3d 318, 323 (6th Cir. 1997)).

On remand, Judge Enslen did not mince his words.  Calling the Sixth Circuit's decision "rude", "difficult to fathom" and "a waste of judicial resources", he the proceeded to complain that:  "This case provides the Court an opportunity to comment on the judicial process and, unfortunately, to decry that a correct legal decision may, nevertheless, be reversed when it is badly argued by the Government and the Court of Appeals is focused more on calling attention to its own decisions than deciding cases in accordance with the clearly erroneous standard."  (Id., at 255).

Perhaps the most interesting part of Judge Enslen's decision was his reference to a Seventh Circuit decision that defined the "clearly erroneous standard."  That court stated:

"[U]nder the clearly erroneous standard, we cannot meddle with a prior decision of this or a lower court simply because we have doubts about its wisdom or think we would have reached a different result.  To be clearly erroneous, a decision must strike us as more than just maybe or probably wrong; it must, as one member of this court recently stated during oral argument, strike us as wrong with the force of a five-week old, unrefrigerated dead fish. . . . [T]he panel's decision must be dead wrong, and we do not believe it is."  Parts and Elec. Motors, Inc. v. Sterling Elec. Inc., 866 F.2d 228, 233 (7th Cir. 1988).
 


QUOTE OF THE WEEK  - "The methods we employ in the enforcement of our criminal laws have aptly been called the measures by which the quality of our civilization may be judged."  Coppedge v. United States, 369 U.S. 438, 449 (1962).

Encouraged by the astonishing indifference of the courts to the disgusting and barbarous nature of strip searches, the Bureau of Prisons has converted strip searches into an art form without purpose - other than meanness and total subjugation.  Consider, for example, prisoners who are transported from one prison to another.  First, they are forced to stand naked while they are strip searched; then they are given new, carefully inspected clothes; and then they are handcuffed and shackled before they board prison busses or planes where they are under constant watch of armed guards.  Upon arriving at their new destination, the process is again repeated despite the fact that there is not one iota of evidence that those same prisoners could possibly have obtained any new contraband or weapons.  Any honest prison guard (which is not the oxymoron that jumps out, as more and more prison guards are becoming fed up with being forced to become participants in such revolting, uncivilized tactics) will affirm that the repeated use of strip searches on prisoners has nothing to do with finding contraband, but instead is encouraged - and even demanded - by the BOP as a means of degrading and humiliating the prisoners for the sole purposes of proving who is the master and of instilling the atmosphere of absolute submission.

In that vein, consider the words of two courts on the now-common practice of such mass strip searches.  The Seventh Circuit has described "strip searches involving the visual inspection of the anal and genital areas as demeaning, dehumanizing, undignified, humiliating, terrifying, unpleasant, embar rassing, repulsive, signifying degradation and submission."  Mary Beth G. v. City of Chicago, 723 F.2d 1263, 1272 (7th Cir. 1983).  And, in a ruling that should (but probably won't) challenge the BOP's senseless and barbaric "game", the First Circuit has ruled that decisions to engage in strip searches must be "based on articulable factual information bearing at least some indicia of reliability."  Wood v. Clemons, 89 F.3d 922, 929 (1st Cir. 1996).  The Court's rationale in that case was that strip searches "can hardly be characterized as a routine procedure or as a minimally intrusive means of maintaining prison security.  Indeed, ‘a strip search, by its very nature, constitutes an extreme intrusion upon personal privacy, as well as an offense to the dignity of the individual."  (Id., at 928).

For another particularly brutal example of the use of strip searches to punish those who don't submit, you may want to read Spear v. Sowders, 71 F. 3d 626 (6th Cir. 1995), which has been summarized in our Crazy Case section of this Site.