When the Supreme Court declared in United States v. Booker that the mandatory application of the federal sentencing guidelines was unconstitutional, many white-collar criminal defense attorneys hoped that judges would free themselves of the shackles of the rigid formulas employed by the guidelines. And why not? The Booker decision compelled district courts to utilize the factors set forth in 18 U.S.C. Section 3553(a) when imposing sentences. While Section 3553(a) directs courts to consider the range established by the guidelines, it also requires consideration of factors not normally recognized by the guidelines such as the history and characteristics of the defendant — factors generally significant in white-collar cases.
Unfortunately, the district courts remained tethered to the guidelines, as most circuit courts granted the guidelines a “presumption of reasonableness” and required sentences below the “advisory” range to possess extraordinary factors to survive appeal. The Supreme Court did not help matters when, in Rita v. United States, it validated the 4th U.S. Circuit Court of Appeals’ “presumption of reasonableness” of within-the-guidelines sentences. Rita, however, left open the question of how appellate courts should treat sentences that fall outside the guidelines.
Gall v. United States and Kimbrough v. United States answer that question and provide white-collar defendants with a sound basis to argue for lower sentences. As shown below, Gall and Kimbrough free sentencing judges from the guidelines by restoring judges’ discretion to craft appropriate sentences. This discretion can result in shorter sentences for white-collar defendants when counsel shows that a sentence within a particular guidelines range would be contrary to Section 3553(a)’s objectives because it would represent a sentence “greater than necessary” to achieve the purposes of the statute.
Gall v. U.S.
In Gall, the defendant Brian Gall joined an ongoing enterprise for the distribution of ecstasy during his second year of college. Gall stopped his personal use of ecstasy after two months and stopped selling drugs after approximately seven months. He eventually went on to graduate from college and secure a job. Several years later, Gall was indicted and pled guilty to conspiracy to distribute drugs.
Gall’s pre-sentence report recommended a sentence of 30 to 37 months of imprisonment. The district judge instead sentenced Gall to 36 months of probation, thoroughly explaining the decision on the record and in a memorandum. The district court specifically noted that Gall’s post-offense conduct “was the pre-Indictment product of the Defendant’s own desire to lead a better life,” as opposed to an effort “to please the Court or any other governmental agency.” On appeal, the 8th Circuit reversed and remanded, holding that when sentencing outside of the guidelines range, the justification for the departure must be proportional to the amount of the departure.
The Supreme Court reversed, holding that the appellate court’s rule requiring “proportional” justifications was not consistent with the Supreme Court’s ruling in Booker. The court specifically rejected an “appellate rule that requires ‘extraordinary’ circumstances to justify a sentence outside the Guidelines range” or “the use of a rigid mathematical formula … for determining the strength of the justifications required for a specific sentence.” The court found that these approaches “come too close to creating an impermissible presumption of unreasonableness for sentences outside the Guidelines range.” The court also criticized any method that quantifies the “variance as a certain percentage of the … sentence recommended by the Guidelines,” because such a method fails to give any weight to the conditions of probation, which “substantially restrict [a defendant's]
Kimbrough v. U.S.
In Kimbrough, defendant Derrick Kimbrough plead guilty to four charges, including possession with intent to distribute more than 50 grams of crack cocaine. His guilty plea to the four charges subjected him to an aggregate sentence of 15 years to life in prison. Based on the quantity of drugs, Kimbrough’s false testimony at his codefendant’s trial, his criminal history, and his use of a firearm in commission of his crime, the district court determined that the advisory guidelines range was 228 to 270 months of imprisonment.
The district court, however, found that a sentence in this range would have been “greater than necessary” to accomplish the purposes of the guidelines. Specifically, the district court stated that the case exemplified the “disproportionate and unjust effect that crack cocaine guidelines have in sentencing.” Accordingly, the district court sentenced Kimbrough to the statutory minimum of 15 years of imprisonment, finding that such a sentence was “clearly long enough” to accomplish the objectives of Section 3553(a). The 4th Circuit reversed, holding that a sentence outside of the guidelines range is “per se unreasonable, when it is based on a disagreement with the sentencing disparity for crack and powder cocaine offenses.” The Supreme Court reversed the Court of Appeals, finding that it erred in holding that the crack/powder cocaine disparity is effectively mandatory. Rather, under Booker, all sentencing guidelines are only advisory.
The court held that a sentencing judge “must include the Guidelines range in the array of factors warranting consideration,” but may determine that “a within-Guidelines sentence is ‘greater than necessary’ to serve the objectives of sentencing.” The court noted that while Section 3553(a) “still requires a court to give respectful consideration to the Guidelines, Booker ‘permits the court to tailor the sentence in light of other statutory concerns as well.’” Importantly, the court noted that, because the guidelines are now advisory, courts may vary from them based solely on policy considerations, such as disagreement with the guidelines.
Although Gall and Kimbrough are drug cases, they apply to all criminal defendants, including white-collar defendants. In upholding the below-guidelines sentences involved, the court underscored the sentencing judge’s duty “to impose a sentence sufficient, but not greater than necessary, to comply with the” objectives set out in Section 3553(2) and reinforced the use of judicial discretion in imposing such a sentence. To take full advantage of the rulings in Gall and Kimbrough, counsel for a white-collar defendant should show the sentencing judge that aggravating factors, such as the amount of loss, are driving the guidelines range to a level that is “greater than necessary” if the court properly considers the other Section 3553(a) factors, such as the defendant’s history and characteristics.
History and Characteristics of Defendant
Section 3553 requires the court to consider factors that are disfavored by the sentencing guidelines. For example, Section 3553(a)(1) directs the sentencing judge to consider the history and characteristics of the defendant in imposing a sentence. On the other hand the guidelines discourage courts from considering certain facts about a defendant such as age, education, employment record and family ties.
In Gall, the Supreme Court validated the district court’s consideration of post-offense conduct and other Section 3553(a) factors, such as age, education, employment record and family ties. These are precisely the factors that many white-collar defendants should highlight.
A defendant’s employment record and family and community ties should be promoted. Usually, a white-collar defendant will have an educational background worth noting at sentencing. The age of the defendant should also be considered. In Gall, the court approved of the district court’s consideration of “Gall’s immaturity at the time of the offense as a mitigating factor.” If youth can serve as a mitigating factor, then so can old age, especially when arguing that the defendant will not pose a recidivism problem.
Presenting a favorable argument regarding the history and characteristics of the defendant will always provide counsel with a solid foundation for arguing that the guidelines range in the case presents a sentence “greater than necessary.” As noted above, the guidelines do not take into account any of the history or characteristics that Section 3553(a)(1) requires the sentencing judge to examine. How can such a range be fair when it does not consider the very factors that Section 3553(a)(1) and the Supreme Court dictate be considered?
Amount of Loss
The calculation of a guidelines range in most white-collar cases involves a consideration of the “amount of loss” as a specific offense characteristic under U.S.S.G. Section 2B1.1. The amount of loss is extremely significant to a guidelines range: As the amount of loss goes up, so do the number of points that are added to a defendant’s offense level. This does not always result in a just sentence as a quick example shows: Say Defendant A embezzles $10,000 from Mom & Pop Shop, forcing the shop to close down. Defendant B embezzles $100,000 from Exxon, barely causing a ripple in Exxon’s day-to-day activities. Defendant A’s amount of loss increases his guidelines range by four points while Defendant B’s range is increased by eight.
What if the sentencing judge does not believe that Defendant B should receive a harsher sentence simply because he picked a victim that could sustain a greater loss? Before Kimbrough, such a disagreement with the treatment of the amount of loss could not serve as a basis for sentencing below the guidelines range.
However, Kimbrough underscores the district judge’s discretion to disagree with the guidelines, based on his familiarity with the case: “The sentencing judge, on the other hand, has greater familiarity with … the individual case and the individual defendant before him than the Commission or the appeals court. He is therefore in a superior position to find facts and judge their import under Section 3553(a) in each particular case.” It is standard to negotiate and even litigate the amount of loss in white-collar cases. But, Kimbrough opens the door to arguing that even an undisputed amount should not serve as the basis for a sentence that is “greater than necessary” to achieve justice.
A defendant can further argue that the guidelines range resulting from the amount of loss table would create an unwarranted similarity to other criminal defendants from whom the defendant has distinguished himself or herself. In Gall, the district judge sentenced a co-conspirator whose participation in the conspiracy was comparable to Gall’s to 36 months, noting that the co-conspirator had a more serous criminal history and did not withdraw from the conspiracy. The Supreme Court stated that “it is perfectly clear that the district judge considered the need to avoid unwarranted disparities, but also considered the need to avoid unwarranted similarities among other co-conspirators who were not similarly situated.” The Kimbrough court also opined that after its holding in Rita, a sentence that varies from the guidelines will “attract greatest respect” when the sentencing judge finds that the case is “‘outside the heartland’” of cases. Defense counsel should make a point of showing that their client’s case is “outside the heartland” of cases and thus the defendant should not be subjected to unwarranted similarities to other defendants who are not similarly situated.
In both cases, the Supreme Court emphasized the duty of circuit courts to give deference to the district courts when reviewing sentences for reasonableness. This presents a great opportunity to convince judges to sentence defendants to something other than the advisory guidelines range. Gall provides support for non-custodial sentences, which are usually the desired outcome in white-collar cases, by pointing out the restrictions probation places on a defendant’s liberty interests: “Probationers may not leave the judicial district, move, or change jobs without notifying, and in some cases receiving permission from, their probation officer or the court. They must report regularly to their probation officer, permit unannounced visits to their homes, refrain from associating with any person convicted of a felony, and refrain from excessive drinking.” As such, in appropriate cases, defense counsel should not be reluctant to argue for a non-custodial sentence given their substantial restrictions of freedom.
The greatest benefit enjoyed in the wake of Gall and Kimbrough is the comfort district courts should feel in using their judgment and experience in formulating the appropriate sentence for defendants that appear before them. This is especially true for white-collar defendants who, because of the notoriety of their cases, often face a public demanding sentences not warranted by the facts of the case.
Riley H. Ross III is an associate in the commercial litigation department at Drinker Biddle & Reath. His practice focuses on white-collar criminal defense and corporate investigations. Ross represented Derrick Kimbrough at the trial level and before the 4th Circuit as an assistant federal public defender in Norfolk, Va.
A. Kristina Littman is an associate in the commercial litigation department at Drinker Biddle & Reath. Her practice focuses on white-collar criminal defense and securities litigation.