Vol. 12, Nos. 31 & 32	Covering Cases Published in the Advance Sheets through Aug. 8, 2005

• In the Electronic Submission matter, the Tenth Circuit has issued a comprehensive Emergency Order which shows how the Internet has changed the practice of law. The Order amends and expands the required procedures regarding the electronic filing of documents in all cases (except social security cases) by all parties who are represented by counsel.

Forfeiture

• Both the Razmilovic case from the Second Circuit and the Wingerter case from the E.D.Va. address the law relating to the pretrial restraint of forfeitable assets in criminal cases. Following the majority view, the Second Circuit held that 28 U.S.C. § 2461(c) does not authorize pretrial restraint of tainted assets; while in Wingerter, Judge Ellis followed the minority view and held that 18 U.S.C. § 982(b) permits the Government to restrain, pretrial, all property subject to forfeiture including any substitute assets, such as an inheritance.
  
  
• In the Betancourt case, the Fifth Circuit rejected a series of constitutional and statutory attacks on the validity of a forfeiture order which denied the defendant any share in more than $5 million in winnings from the Texas lottery after he had been convicted of drug trafficking.
  

Sentencing

• The Chauncey case from the Eighth Circuit is noted for Judge Lay’s blistering dissent in which he condemned as cruel and unusual punishment a 100-month sentence imposed on the defendant for purchasing less than two ounces of marijuana to help a friend alleviate the effects of her multiple sclerosis.
  
  

The DOJ's Petite Policy

• The Wilson case from the Third Circuit is noted for Judge Aldisert’s spirited dissent in which he found “appalling” the Government’s “blatant judge shopping” which it accomplished by ignoring its own double jeopardy guidelines, known as the Petite Policy, and initiating Federal drug charges against the defendant after a state court had earlier dismissed the same charges because of an illegal detention.

Snippets of American Justice

• In Florida, convicted sex offenders are now banned from public hurricane shelters; instead they are told to go to weather the storms in prisons that will take them in.
  
  
• In Pueblo, CO, District Judge Marcia Krieger, a recent appointee of President Bush, sentenced a 27-year old quadriplegic to six months in prison for violating the terms of his probation by accessing the Internet.

U.S. v. Booker - Update

A growing debate is emerging in the lower courts about the proper standard of proof that should be used for the purpose of determining sentences under the Guidelines. The commentary to U.S.S.G. § 6A1.3 states that "The Commission believes that use of a preponderance of the evidence standard is appropriate to meet due process requirements and policy concerns in resolving disputes regarding application of the guidelines to the facts of a case." However, that provision has not been officially re-examined since the advent of Apprendi, Blakely and Booker; and the Supreme Court has never defined a constitutional minimum burden of proof at sentencing.

Last week, two judges from the District of Nebraska weighed in on that topic; and the spirited advocacy of their contrary positions suggests that the proper standard of proof at sentencing is going to become an increasingly contentious topic - at least until the Supreme Court or Congress intervenes on this issue.

U.S. v. Okai, No. 4:05CR19 (D.Neb. 08/22/05) (Judge Bataillon)

In this case, the indictment did not charge any relevant conduct beyond a single incident. The government (and the presentence report) used other conduct to increase the amount of loss. The defendant contested any loss beyond his admissions during and after the plea.” After a detailed analysis of the issue, Judge Bataillon concluded that he should not base "any significant increase in a defendant's sentence on facts that have not been proved beyond a reasonable doubt.

For an outstanding analysis of the reasoning and significance of Judge Bataillon’s ruling, see the commentary posted on the Ninth Circuit Blog by FPD Steven Sady entitled “Okai: doctrine of constitutional avoidance requires that federal sentencing statutes be construed to require proof beyond a reasonable doubt.”

Judge Bataillon's ruling in this case drew an immediate and vitriolic response from his confrere on the bench, Judge Richard Kopf. On August 31, 2005, Judge Kopf posted an unusual special Memorandum and Order on the Website for the District of Nebraska, entitled "In the matter of cases pending sentencing before Judge Richard G. Kopf." In that Order, Judge Kopf stated:

"I respectfully disagree with his assertion that the Fifth Amendment requires a judge to find facts beyond a reasonable doubt when sentencing a defendant who has been previously found guilty after a trial or a plea that complies with Constitutional requirements. Nothing in Booker, Blakely, or Apprendi compels or justifies such an assertion. Indeed, one need only read the cases Judge Bataillon cites to recognize the legal weakness of his views. Once the ordinary criminal has been found guilty by plea or trial that complies with the constitution, there is no applicable precedent for cloaking an undisputably guilty person with the Constitutional protections intended for the innocent.

"If the Fifth Amendment is to be expanded beyond any currently recognized legal boundaries, that decision should be left to the Court of Appeals or the Supreme Court, bodies far better suited than individual district judges to 'discovering' new Constitutional rights. Booker and its (tangled) predecessors do not provide a legitimate invitation for district judges to implement their personal policy views about proof standards. See, e.g., United States v. Pirani, 406 F.3d 543, 551 n.4 (8th Cir. 2005) (en banc) ('Nothing in Booker suggests that sentencing judges are required to find sentence-enhancing facts beyond a reasonable doubt under the advisory Guidelines regime.').

"In the end, and while what Judge Bataillon proposes may be good policy (although I doubt it), his newly discovered Constitutional right to 'proof beyond a reasonable doubt' at sentencing is like the mythological chimera (a fire-breathing she-monster with a lion’s head, a goat’s body, and a serpent’s tail). It is the product of an agile mind, but it has no claim to the here and now."

U.S. v. Razmilovic, No. 04-4543-cr (2nd Cir. 08/17/05) (Judge Winter)
U.S. v. Wingerter, 369 F.Supp.2d 799 (E.D.Va. 2005) (Judge Ellis)

Both of these cases address the extraordinary remedy of a pretrial [and thus pre-conviction] restraint of assets. As the Second Circuit explained in Razmilovic, there are only four forfeiture statutes that specifically authorize the pretrial restraint of forfeitable assets, namely 18 U.S.C. § 1963(d) (pretrial restraint in RICO cases); 21 U.S.C. § 853(e) (pretrial restraint in drug cases); 18 U.S.C. § 1467(c) (pretrial restraint in obscenity cases); 18 U.S.C. § 2253(c) (pretrial restraint in child pornography cases)].

However, the Court also explained that “most criminal forfeiture statutes [all of which it listed in footnote 2] do not set forth the procedures to be followed; instead, they . . . incorporate the procedures of Section 853, other than subsection (d). . . . We have never held that any of them authorize pretrial restraint. Indeed, no reported case has mentioned pretrial restraint under any of the statutes listed in Note 2, with one exception.”

That one exception is the general criminal forfeiture statute, 18 U.S.C. § 982(b); and the Court cited a number of rulings from the Fourth, Seventh, Eighth, Ninth and Tenth Circuits which have held that § 982(b) does authorize pretrial restraint of tainted assets. .

Razmilovic

The defendants in this case were charged with securities fraud, wire fraud and other related charges involving the stock of Symbol Technologies, Inc., a publicly traded corporation. As part of its proceedings against one of the defendants, Kenneth Jaeggi, the Government gave notice that it would seek forfeiture of certain of his assets if he was convicted. The Government then sought an ex parte pretrial order freezing the assets it claimed were criminally derived. Judge Wexler of the E.D.N.Y. (who rarely objects to anything on the Government’s wish list) granted the restraining order. On appeal, the Second Circuit reversed.

The question before the Court was whether the criminal forfeiture statute at issue (28 U.S.C. § 2461, which was enacted as part of the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”)) permits a court to freeze a defendant’s assets, pre-trial.

Section 2461(c) directs that "upon conviction" an order of "forfeiture" shall be entered "in accordance with the procedures" set out in 21 U.S.C. § 853, the forfeiture statute applicable for drug crimes. Section 853, in turn, authorizes criminal forfeiture as a punishment for drug crimes and sets forth the procedures governing such forfeiture, the forfeitable property, and the forfeiture-related actions that are allowed.

In explaining why, under § 2461(c), the term “‘forfeiture’ cannot include pretrial restraint,” the Court noted that forfeiture is the "divestiture of property without compensation"; and, it constitutes “punishment for a crime and necessarily occurs post-conviction.” The Court then continued:

“The distinction between forfeiture and pretrial restraint is no technical play on words. Pretrial restraint is a severe remedy independent of a right to damages or property following a finding of liability. Indeed, the Supreme Court has dubbed pretrial restraint as a '”nuclear weapon” of the law.’ Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 332 (1999).”

For all those reasons, the Court vacated Judge Wexler’s improvidently granted restraining order.

Wingerter

In this multi-defendant, multi-count prosecution for immigration document fraud, one defendant, Rex Wingerter, moved for the release of certain of his funds that were subjected to pretrial restraint at the request of the Government as substitute assets subject to forfeiture upon conviction pursuant to 21 U.S.C. § 853(e)(1)(A). Wingerter claimed that the funds subject to the restraining order the United States obtained pursuant to § 853 were traceable to an inheritance and thus were untainted funds.

In rejecting that argument, Judge Ellis observed:

“The Fourth Circuit . . . stands alone among the circuits in holding that the government may seek pretrial to restrain not only tainted assets, but substitute property as well.” (Id., at 806) . . . [A]lthough the rule is otherwise in other circuits, it is well-settled in the Fourth Circuit that upon application of the United States and upon the filing of an indictment charging a criminal violation listed in § 982, all property subject to forfeiture, including any substitute assets, may be restrained pretrial pursuant to § 853(e)(1).

“It is also well-settled that pretrial restraint of property, when there is probable cause to believe that it will be subject to forfeiture, does not violate a defendant's Sixth Amendment right to counsel, even if the restraint of these funds makes it impossible for him to pay and retain his chosen lawyer. As the Supreme Court has made clear, the government's strong interest ‘in obtaining full recovery of all forfeitable assets . . . overrides any Sixth Amendment interest in permitting criminals to use assets adjudged forfeitable to pay for their defense.' Caplin & Drysdale v. U.S., 491 U.S. 617 (1989). Thus, to preserve the availability of these assets for forfeiture upon conviction, they may be restrained pretrial without offending a defendant's constitutional rights so long as there is a finding of probable cause to believe that they are subject to forfeiture.” (Id., at 807).

Thus, Judge Ellis concluded that the grand jury's probable cause finding and the Government's allegations supported forfeiture of substitute assets; and held that the substitute assets at issue in this case could be restrained pretrial and made unavailable for defendant to pay his attorney.

U.S. v. Chauncey, No. 04-1529 (8th Cir. Aug. 25, 2005) (Judge Colloton)

The defendant in this case, Robert Lee Chauncey, was convicted at trial of possessing with intent to distribute less than two ounces of marijuana that cost $240. The marijuana in question was actually purchased by Chauncey’s companion and co-defendant, Mary Fast Horse; and it was undisputed that the marijuana was intended for her own personal consumption “to help alleviate the painful effects of her multiple sclerosis.” In fact, when Chauncey and Fast Horse were stopped because of expired license plates, the marijuana was actually found in Fast Horse’s purse.

Despite those extenuating circumstances, Chauncey received a sentence of 100 months in prison, in large part as a result of a criminal history that classified him as a career offender. Showing her eternal gratitude for Chauncey’s help in her time of need, Mary Fast Horse, cooperated with the Government and testified against Chauncey - and she received a sentence of only two years probation!

In a biting dissent, Judge Lay argued that Chauncey’s sentence was “so grossly disproportionate to the offense that it violates the Eighth Amendment.” He continued:

“In the case at bar, Chauncey's crime was possessing marijuana with intent to distribute and aiding and abetting the same. The offense involved less than two ounces of marijuana - perhaps a few weeks' supply for an average user. Considering Chauncey's undisputed purpose was to help Mary Fast Horse obtain marijuana to alleviate the painful effects of her multiple sclerosis, this offense lacks the severity typically associated with sentences of this length. The typical sentence for this crime under federal law, even for someone with Chauncey's criminal history, is usually six to twelve months of imprisonment. See U.S.S.G. § 2D1.1(c). Application of the Career Offender Guideline, see U.S.S.G. § 4B1.1, augmented Chauncey's sentence to 100 months of imprisonment - roughly ten times greater than the usual sentence.

“However, even after considering Chauncey's criminal history, a 100-month sentence is disproportionate. Chauncey's first prior offense was involuntary manslaughter, which arose out of a car accident in 1990. This offense, while violent, lacks the type of intent normally associated with a career offender and has never been repeated. Chauncey's second prior offense - selling one-quarter ounce of marijuana for fifty dollars in 1998 - lacks the severity, frequency, and gravity of the drug offenses that typically pepper the criminal histories of career offenders.

“The glaring disparity between the sentence imposed upon Chauncey and that imposed upon Fast Horse bolsters my conclusion that Chauncey's sentence was disproportionate to his crime. Fast Horse pled guilty to the exact same offense as Chauncey, yet she was sentenced only to two years of probation. This sentence not only differs in duration, it differs in kind since Fast Horse served no time in prison. Undoubtedly her guilty plea motivated the prosecutor to grant some degree of leniency, but this alone cannot justify the severely disparate treatment in sentencing, and neither does Chauncey's criminal record.

“Taken together, these factors warrant a holding that a 100-month sentence for possession with intent to distribute less than two ounces of marijuana is disproportionate to the offense. As Chauncey points out, the Government can cite ‘no case that has approved a sentence as harsh’ as Chauncey's ‘for possession with intent to distribute less than two ounces of marijuana.’ Reply Brief at 25. I respectfully dissent.”

U.S. v. Wilson, 413 F.3d 382 (3rd Cir. 2005) (Judge Ambro)

In this case, the Third Circuit explored in some depth the Department of Justice’s make-believe “Dual and Successive Prosecution Policy,” known as the Petite Policy, which (at least in theory) bars a Federal prosecution following a state prosecution for the same acts “unless the reasons are compelling.” As set forth in § 9-2.031 of the U.S. Attorneys’ Manual, the Petite Policy:

“precludes the initiation or continuation of a federal prosecution, following a prior state or federal prosecution based on substantially the same act(s) or transaction(s) unless three substantive prerequisites are satisfied: first, the matter must involve a substantial federal interest; second, the prior prosecution must have left that interest demonstrably unvindicated; and third, applying the same test that is applicable to all federal prosecutions, the government must believe that the defendant's conduct constitutes a federal offense, and that the admissible evidence probably will be sufficient to obtain and sustain a conviction by an unbiased trier of fact. In addition, there is a procedural prerequisite to be satisfied, that is, the prosecution must be approved by the appropriate Assistant Attorney General."

In the instant case, Esco Wilson was initially arrested and charged under Pennsylvania law possession of cocaine with intent to distribute; but those charges were subsequently dropped when a state judge ordered the exclusion of the drugs and various post-arrest statements made by Wilson on the grounds that they were the fruits of an illegal detention. Not satisfied with that result, the Feds quickly obtained an indictment against Wilson based on the same incident.

Wilson sought to dismiss his Federal indictment, citing, inter alia, the DOJ’s failure to follow the procedures specified in its own Petite Policy. When the district court declined to grant him any relief, Wilson appealed to the Third Circuit. The majority agreed that the Government’s failure even to pay lip service to that Policy was “disturbing”; but it concluded that such a failure did not create any enforceable rights for criminal defendants. As a result, the majority said that it was “constrained to conclude” that it was not permitted to grant any relief to Wilson.

In dissent, Judge Aldisert condemned what he called the Government’s “blatant exercise of judge shopping,” and he wrote in part:

“I am troubled by a policy that automatically triggers a federal prosecution merely because "there has been a suppression of evidence based on state law or on an erroneous interpretation of federal law by a state court." I believe this policy generates serious problems. It increases the caseload in federal courts, runs counter to modern concepts of federalism, denigrates the quality of the state-court system, trial and appellate, demeans the professionalism of state-court judges who have more experience, indeed much more experience, in deciding federal constitutional questions in criminal proceedings than federal judges and in view of the recent teachings of Smith v. Massachusetts, 160 L. Ed. 2d 914, 543 U.S. ___, 125 S. Ct. 1129 (2005), probably violates the Double Jeopardy Clause of the United States Constitution.

“The very admission in open court that the federal government will initiate a new prosecution in cases where state courts suppress evidence has a pernicious effect on the rights of state-court defendants seeking to vindicate Fourth Amendment rights. The federal government's message to state judges is clear: ‘Do not suppress evidence. If you do, we'll institute a new federal prosecution on the same facts even though the investigation and arrest were made by state authorities and the state conducted the prosecution.’ This policy allows the United States, in effect, to use federal courts to review any state judge's federal constitutionally-based decision on a motion to dismiss.

“To me, this is appalling.”

In Brief

BOP - Drug Treatment Programs: Few criminal defense attorneys nationwide monitor the activities of the Bureau of Prisons (BOP) more diligently nor more adroitly than Stephen R. Sady, the indefatigable Federal Public Defender from Portland, OR. Once again, his tireless efforts have produced two important victories blocking the BOP’s persistent and arbitrary efforts to limit the early release benefits envisioned by the residential substance abuse programs (often referred to as DAP) authorized by 18 U.S.C. § 3621(e):

•• Paulsen v. Daniels, 413 F.3d 999 (9th Cir. 06/27/05) - This case involved 16 consolidated appeals challenging interim regulations issued by the BOP in 1997, which decreed that prisoners who had been incarcerated for an offense that involved the possession, use or carrying of a firearm were ineligible for participation in the BOP’s residential substance abuse treatment program. The Court held that the BOP had “plainly violated” the Administrative Procedure Act in its promulgation of the 1997 interim regulations, and that because the effect of the regulations was to deny the petitioner-inmates a sentence reduction based on the successful completion of the DAP, the inmates had clearly sustained an injury in fact that gave them standing to seek relief in the courts.

•• Wade v. Daniels, 373 F.Supp.2d 1201 (D.Or. 06/20/05) - In this case the petitioner charged that the BOP had unconstitutionally denied him early release eligibility under 18 U.S.C. § 3621(e) by ruling him ineligible for participation in the BOP’s residential substance abuse treatment program. Chief Judge Haggerty concluded that “There is cogent evidence that but for the BOP's misadvice, petitioner's application to the program would have been acted upon in July 1998, and the BOP's error should not inhere to the detriment of petitioner. Had the BOP considered petitioner's request in 1998, he should have been accepted into the program, only to be prospectively (and erroneously) found ineligible for early release consideration under the 1997 interim regulation, thereby placing him within the group of petitioners that are now deemed eligible for the early release incentive.”

Because Judge Haggerty found that the petitioner was eligible for early release under the rules in effect at that time, he granted the petitioner's petition for writ of habeas corpus and ordered the BOP to deem the petitioner eligible for a reduction of his period of custody. He then ruled that, upon petitioner's successful completion of the DAP, the BOP “shall grant a reduction of one year from petitioner's sentence.”

Clergy Abuse and Civil RICO: Hall v. Tressic, No. 5:04-CV-925 (N.D.N.Y. 08/15/05) - In this decision, Judge Hurd dismissed with prejudice the plaintiff’s efforts to boot-strap his allegations of sexual abuse by a priest into a broad civil RICO action against the Catholic Church. The Court held that accusations that the Church had mishandled clergy sex abuse cases failed to demonstrate "sufficient acts over a long enough period of time to demonstrate a pattern of racketeering activity to sustain" a RICO claim. The Court also said the plaintiff's alleged injury, to the extent that it did include allegations of racketeering, must fail for lack of a nexus between the alleged injury and the alleged racketeering.

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