United States v. Labbe ( 2009 )

08-0673-cr
U.S. v. Labbe
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2009
Heard: October 16, 2009 Decided: December 4, 2009
Docket No. 08-0673-cr
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UNITED STATES OF AMERICA,
Appellee,
v.
KENNY OLA LABBE,
Defendant-Appellant.
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Before: NEWMAN, POOLER, and KATZMANN, Circuit Judges.
Appeal from the January 31, 2008, judgment of the United States
District Court for the Southern District of New York (Robert W. Sweet,
District Judge) sentencing the defendant to 87 months’ imprisonment
for interstate transportation of stolen property in violation of 18
U.S.C. § 2314. Defendant contends that he was improperly denied a
minimal role adjustment that the District Judge had contemplated
giving in a written sentencing opinion. We conclude that the decision
not to impose the contemplated adjustment requires findings, and we
remand for that purpose.
Remanded.
Devin McLaughlin, Langrock Sperry &
Wool, LLP, Middlebury, VT, for
Defendant-Appellant.
Seetha Ramachandran, Asst. U.S. Atty.,
New York, N.Y. (Lev L. Dassin, Acting
U.S. Atty., Iris Lan, Asst. U.S.
Atty., New York, N.Y., on the brief),
for Appellee.
JON O. NEWMAN, Circuit Judge.
This sentencing appeal challenges a District Judge’s denial at a
sentencing hearing of a minimal role adjustment, U.S.S.G. § 3B1.2(a),
in making a Sentencing Guidelines calculation after the Judge had
stated in a carefully prepared “Sentencing Opinion” that the defendant
was entitled to the adjustment. Kenny Ola Labbe, a citizen of
Nigeria, appeals from the January 31, 2008, judgment of the United
States District Court for the Southern District of New York (Robert W.
Sweet, District Judge), sentencing him principally to 87 months’
imprisonment upon his plea of guilty to interstate transportation of
stolen property, in violation of 18 U.S.C. § 2314. Although we have
no desire to inhibit the commendable practice of issuing an indication
of a likely sentence in advance of a sentencing hearing, we conclude
that procedural error occurs when a defendant is not alerted to a
likely change from a judge’s anticipated Guidelines calculation and
when that change is not sufficiently supported by the Judge’s
findings. We therefore remand so that at a renewed sentencing
hearing, Labbe, now on notice that a minimal role adjustment is likely
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to be denied, can personally and through counsel make a full argument
for such an adjustment and so that the District Judge, after
considering both the Government’s and the defendant’s presentations
concerning that adjustment, make a fresh determination, supported by
appropriate findings, as to whether an adjustment is warranted.
Background
Labbe was indicted for transporting stolen property in interstate
commerce, in violation of 18 U.S.C. § 2314, and conspiracy to commit
that offense, in violation of 18 U.S.C. § 371. The conduct
constituting the substantive offense was alleged to have occurred
between December 2005 and January 2006. The conspiracy was alleged to
have spanned the interval between 2002 and January 2006. These
charges stemmed from an elaborate scheme to steal and cash checks sent
to a lockbox maintained by JP Morgan Chase Bank (“Chase”). Chase
account holders sent checks to the lockbox to be credited to their
accounts. One of the conspirators stole quantities of checks from the
lockbox. Another conspirator sent unsolicited e-mails to strangers
throughout the United States claiming to seek help to complete a
financial transaction. Some of these strangers became unwitting
participants in the scheme by providing their names and addresses to
conspirators. Conspirators removed the true payee’s name from a
stolen check and substituted the name of an unwitting participant.
The altered check was then mailed to the participant, who deposited
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the check in his own account and wired a portion of the proceeds to an
overseas bank account controlled by a conspirator.
Labbe pled guilty to both counts of the indictment. At the plea
colloquy before a Magistrate Judge, he acknowledged that his acts
constituted the elements of the charged offenses, but he asserted that
he had not acted “in the way” the offenses were detailed in the
indictment. Questioned carefully by the Magistrate Judge, Labbe
stated that an individual had approached him and asked for help in
mailing some checks. Labbe said an individual gave him a list of
names, and Labbe had to match the list with certain checks, place
addresses he had been given on envelopes, and send the checks from a
Federal Express office. He was to do this during a brief interval
while the individual was out of the country. Labbe admitted that he
knew the checks were stolen, but denied knowing they had been altered.
He subsequently told the Probation Department that he was promised
some indefinite form of payment, which he never received, and that he
pocketed only $400 that was left over from the funds given him to send
the checks.
The Presentence Report (“PSR”) began the Guidelines calculation
with a base offense level of 6, see U.S.S.G. § 2B1.1(a)(2), added 20
levels for a loss greater then $7 million but less than $12 million,
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see id. § 2B1.1(b)(1)(K),1 added 4 levels because the offense involved
more than 50 victims, see id. § 2B1.1(b)(2)(B), and added 2 levels
because a substantial part of the offense was committed outside the
United States, see id. § 2B1.1(b)(9)(B). Subtracting 3 levels for
acceptance of responsibility, see id. § 3E1.1(a), (b), the PSR arrived
at an adjusted offense level of 29, which, with Criminal History
Category III, yielded a sentencing range of 108 to 135 months. The
PSR recommended a term of 108 months.
After receiving sentencing submissions from the Government and
the defendant, Judge Sweet issued a 21-page “Sentencing Opinion,”
dated January 23, 2008. Describing the offense conduct, Judge Sweet
wrote that Labbe and others “caused the stolen lockbox checks . . . to
be altered” and “removed the original payees’ names from the stolen
checks and replaced them with the names of participating e-mail
recipients,” that Labbe sent packages of stolen checks via Federal
Express to participating e-mail recipients, and that Labbe asked an
internet café owner to scan and e-mail a document that contained a
list of individuals, their contact information, and dollar amounts.
Judge Sweet also stated that a Federal Express employee had told an
FBI agent that Labbe had sent packages almost every weeknight from
1
The loss amount was determined by multiplying the amounts of the
checks Labbe sent on the day of his arrest, more than $500,000, by the
number of weeknights Labbe was observed sending packages from the
Federal Express office.
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December 25, 2005, to January 23, 2006. Finally, Judge Sweet stated
that various pieces of paper relating to the scheme had been
discovered at Labbe’s residence.
Using the 2007 Guidelines Manual, Judge Sweet calculated Labbe’s
adjusted offense level to be 23, following the PSR’s calculation with
one difference, which is relevant to this appeal. Judge Sweet wrote,
“Because the defendant’s role in the offense was minimal, he is
entitled to a mitigating role decrease of four levels, pursuant to
U.S.S.G. § 3B1.2(a).” That subsection provides for a four-level
reduction of the offense level “[i]f the defendant was a minimal
participant in any criminal activity.” A two-level reduction is
authorized if the defendant was a minor participant. See U.S.S.G.
§ 3B1.2(b). In Criminal History Category III, the adjusted offense
level of 23 yielded a sentencing range of 57 to 71 months. Judge
Sweet then considered the factors identified in 18 U.S.C. § 3553(a),
determined that a Guidelines sentence was warranted, and concluded,
“For the instant offense, Labbe is hereby sentenced [sic] to a term of
57 months’ imprisonment and a term of supervised release of three
years.” He also ordered forfeiture of $44 million of currency and
U.S. Postal Service money orders totaling approximately $25,000.
Also relevant to this appeal is the concluding sentence of the
Sentencing Opinion: “The terms of this sentence are subject to
modification at the sentencing hearing set for January 29, 2008.”
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Prior to the sentencing hearing, the Government sent Judge Sweet
a letter, objecting to the Court’s contemplated four-level reduction
for a minimal role in the offense. The Government pointed out that
Labbe’s offense level was based only on the loss resulting from his
own conduct in the conspiracy, i.e., mailing checks between December
25 and January 23. Specifically with respect to the minimal role
reduction, the Government stated that Labbe had communicated with a
co-conspirator in Nigeria, had “tried to send him a list of names and
addresses that corresponded to people who were contacted through the
email scam,” and, when arrested, had various documents connected with
the scam.
At the sentencing hearing, Judge Sweet first confirmed that
defense counsel had reviewed the PSR and the Judge’s Sentencing
Opinion with Labbe. The Judge then afforded defense counsel and Labbe
an opportunity to speak. Defense counsel primarily disputed the loss
calculation. With respect to Labbe’s role, counsel first said, “I
think it is important to note that of all the people involved in this
conspiracy, Mr. Labbe really was the lowest on the rung. I know that
your Honor takes that into consideration in a role adjustment,” and
later said, “Even though he has been given a role in the offense
adjustment, I don’t think that truly compensates for the large 20-
level increase that he is being given.” Labbe told the Judge, “I
really did play a very minute part in this.”
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In response, the Government defended the loss calculation and
then said:
I don’t think he can be characterized as a minor or minimal
participant in this scheme. I think the evidence shows that
he had an awareness of what was in the packages, who was
getting these things, trying to fax the document to Nigeria
at the Internet café, the evidence that was recovered from
him when he was arrested, and also the $25,000 in money
orders that was found at his residence after he was
arrested.
Judge Sweet then asked the prosecutor, “What is the government’s
view with respect to the relative participation of all three [Labbe
and two other defendants scheduled for sentencing in the Southern
District]?” The prosecutor ranked co-conspirator Ellis as the highest
because of his activity in buying the checks and deciding which ones
should be used for the scam. She then said that Labbe had
participated in gathering the e-mail addresses and circulating them,
and ranked Labbe below Ellis but higher than co-conspirator Hailey,
the Chase employee who had stolen the checks from the lockbox.
Labbe briefly responded, apparently endeavoring to dispute the
contention that he had gathered the e-mail addresses. He said that
someone had given him “an e-mail to go check.”
Judge Sweet then imposed sentence. He stated, “I think the
government’s argument and its reading of the guidelines with respect
to the minor and minimal participants is right. It is a correct
interpretation.” He then stated that he would impose a Guidelines
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sentence and apply a sentencing range of 87 to 108 months. This range
was apparently derived from an adjusted offense level of 27 (the
originally contemplated level of 23 plus the rejected four-level
reduction for minimal role) and Criminal History Category III. Judge
Sweet imposed a sentence of 87 months’ imprisonment, using the bottom
of the applicable range. The bottom of the range with the
contemplated minimal role adjustment would have been 57 months. The
disallowance of the adjustment therefore raised the sentence by two
and one-half years.
Defense counsel then sought to argue for the minimal role
adjustment, stating that Labbe “had no independent decision-making.
He was told to pick up checks and he was told to take them to a mail
depository. That is what he did. He didn’t steal the checks. He
wasn’t an insider. He was the person who was used by everybody else
to take the checks and mail them off.” Judge Sweet responded, “I
understand.”
After Judge Sweet imposed a forfeiture of $12 million, the
following occurred:
THE DEFENDANT: Your Honor, your Honor, your Honor –
MR. SEIDLER [defense counsel]: I spoke to Mr. Labbe
downstairs and explained to Mr. Labbe your sentencing
opinion and he is extremely upset now because he thinks I
misled him because your Honor imposed a more severe sentence
than the sentencing opinion.
THE COURT: Yes, well, the sentencing opinion, Mr.
Labbe, was one which I determined but I did not have the
advantage of the government’s comments which I have received
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afterwards and I changed my mind.
Discussion
On appeal, Labbe challenges the disallowance of the minimal role
adjustment, contending that the District Court’s change from the
allowance of the adjustment in the sentencing opinion is not supported
by adequate findings.
We have not previously encountered a sentence challenged on the
ground that it differs from the sentence contemplated in a judge’s
sentencing opinion issued after receipt of the PSR but prior to the
sentencing hearing. Labbe makes no claim that the issuance of that
opinion impaired either his or his counsel’s right to be heard prior
to the imposition of sentence. See Fed. R. Crim. P. 32(i)(4)(A)(i),
(ii). No doubt most sentencing judges have formulated a tentative
sentence after reading a PSR. Judge Sweet’s issuance of a sentencing
opinion shares his tentative view with the parties and usefully
focuses their attention on matters worthy of dispute by written
submission or oral presentation. At the same time, despite the
concluding disclaimer stating, “The terms of this sentence are subject
to modification at the sentencing hearing,” the sentencing opinion
understandably raised expectations, which were heightened by the
words, “For the instant offense, Labbe is hereby sentenced to a term
of 57 months’ imprisonment.”
We consider first whether the District Judge, having issued a
sentencing opinion that included the definitive words “is hereby
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sentenced,” should have alerted the defendant to the distinct
likelihood that there would be an adverse change, notably the
disallowance of the role adjustment. The Supreme Court recently
considered an issue concerning appropriate notice from a sentencing
judge in a different context. In Irizarry v. United States, 128 S.
Ct. 2198 (2008), the Court ruled that, once the Guidelines became
advisory, a sentencing judge need not give notice of an intention to
impose a non-Guidelines sentence. Under the mandatory Guidelines
regime, the Court had ruled that a sentencing judge must notify the
parties of an intention to make an upward departure. See Burns v.
United States, 501 U.S. 129, 138 (1991).
The Court’s explanation in Irizarry is instructive for our
situation. First, the Court noted, “Now faced with advisory
Guidelines, neither the Government nor the defendant may place the
same degree of reliance on the type of ‘expectancy’ that gave rise to
a special need for notice in Burns.” Irizarry, 128 S. Ct. at 2202-03.
The Court also said, “Sound practice dictates that judges in all
cases should make sure that the information provided to the parties in
advance of the hearing, and in the hearing itself, has given them an
adequate opportunity to confront and debate the relevant issues.” Id.
at 2203. We think that Judge Sweet’s sentencing opinion, as worded,
did present the defendant with an “expectancy” that gave rise to the
need for notice that a significant change was likely. And such notice
was needed to provide the defendant with “an adequate opportunity” to
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oppose the contemplated change and argue for a role adjustment.
Indeed, the case for notice here is stronger than the one presented in
Burns. The defendant there knew from the Guidelines Manual, case law,
and established practice that an upward departure was available, but
the Court nevertheless ruled that he needed notice of a departure that
the judge was contemplating. In the pending case, the defendant had
less reason to expect a change disallowing the role adjustment that
was included in the sentencing opinion than the defendant in Burns had
to expect an upward departure. Such a change is likely to be more
infrequent and more unexpected than were departures under the
mandatory Guidelines regime.
With respect to the merits of Labbe’s claim for a role
adjustment, we recognize the “very wide latitude” of sentencing judges
“to decide the proper degree of punishment for an individual offender
and a particular crime,” United States v. Cavera, 550 F.3d 180, 188
(2d Cir. 2008) (in banc), and we also recognize that a district judge
has “discretion” in deciding whether to accord a defendant a role
adjustment. See United States v. Habbas, 527 F.3d 266, 274 (2d Cir.
2008). However, although our review is deferential, a sentencing
court “is required to make findings sufficient to permit appellate
review.” United States v. Legros, 529 F.3d 470, 474 (2d Cir. 2008).
Moreover, just as a sentencing judge “must make specific findings as
to why a particular subsection of § 3B1.1 adjustment applies,” United
States v. Ware, 577 F.3d 442, 451 (2d Cir. 2009), we think the judge
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must also make specific findings to support the denial of a role
adjustment that the judge had previously indicated to the parties an
intention to make. Although all of the standards for judicial review
of administrative agency action are not necessarily transferable to
appellate review of district court sentences, we take some guidance
from the Supreme Court’s recent decision in F.C.C. v. Fox Television
Stations, Inc., 129 S. Ct. 1800 (2009), concerning a change of
position by the Federal Communications Commission. The Court there
observed that although “the agency need not always provide a more
detailed justification than what would suffice for a new policy
created on a blank slate, [s]ometimes it must--when, for example, its
new policy rests upon factual findings that contradict those which
underlay its prior policy.” Id. at 1811 (punctuation altered).
In the pending case, Judge Sweet initially described Labbe’s
conduct as sending the altered checks from a Federal Express office
almost every weeknight during a four-week span and trying to fax to an
individual in Nigeria a document with names, addresses, and amounts,
a document Labbe subsequently arranged to have electronically scanned
and e-mailed. Judge Sweet also wrote in his sentencing opinion that
Labbe and others altered the names of the original payees from the
stolen checks. Despite this conduct, and it is not clear what
evidence supports the assertion that Labbe altered payees’ names, the
Judge tentatively concluded that Labbe’s role was “minimal,” entitling
him to a four-level role reduction. In deciding not to make the four-
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level reduction, the Judge said that he agreed with the Government’s
“argument” and “its reading of the guidelines with respect to the
minor and minimal participants,” and that he had changed his mind. We
are left uncertain whether the Judge (a) attributed to Labbe more
misconduct than he had originally found, and, if so, what misconduct,
or (b) was interpreting the relevant guideline differently than
before, or (c) was simply reassessing the significance of Labbe’s
misconduct on the same facts and same understanding of the guidelines
as before. We note that the Government argued to the Judge at the
sentencing hearing that Labbe had “participated in the gathering of
the e-mail addresses,” but it is unclear what evidence supports that
assertion and whether Judge Sweet believed that this assertion was
true.
Under all the circumstances, we conclude that the case should be
remanded so that the District Court may conduct a new sentencing
hearing, afford the defendant and his counsel, now alerted to the
Judge’s inclination not to accord a role adjustment, a full
opportunity to argue for the adjustment, and then determine, on the
basis of appropriate findings, whether to make a minimal role
adjustment, a minor role adjustment, or no adjustment.2 If an
2
Since we are remanding for further findings, we need not
determine the standard of review appropriate for the ultimate decision
as to whether a role adjustment will be made. We have recognized that
“[t]his circuit has not always been consistent in describing the
standard of review for [role adjustments],” United States v. Gotti,
459 F.3d 296, 349 (2d Cir. 2006), as the following decisions
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adjustment is warranted, the sentence should be modified accordingly.
Conclusion
The case is remanded for further proceedings consistent with this
opinion. After resentencing, any party may restore our jurisdiction
by prompt notice to the Clerk of the Court, in which event a renewed
appeal will be submitted to this will be submitted to this panel. See
United States v. Jacobson, 15 F.3d 19, 21-22 (2d Cir. 1994).
illustrate: United States v. Salameh, 261 F.3d 271, 280 (2d Cir. 2001)
(“With regard to the fact-sensitive question of whether a defendant
merits a mitigating role reduction, we review for abuse of discretion
the district court’s application of the Guidelines to the
circumstances of the particular case before it.”); United States v.
Castano, 234 F.3d 111, 113 (2d Cir. 2000) (“We review for clear error
a sentencing court’s finding that a defendant did not play a minor
role in the offense.”); United States v. Gaston, 68 F.3d 1466, 1468
(2d Cir. 1995) (“We review de novo the district court’s legal
conclusion as to whether the circumstances constitute ‘minimal’ or
‘minor’ participation.”). With respect to Guidelines calculations
generally, we have also said, “We review issues of law de novo, issues
of fact under the clearly erroneous standard, mixed questions of law
and fact either de novo or under the clearly erroneous standard
depending on whether the question is predominantly legal or factual,
and exercises of discretion for abuse of discretion.” United States v.
Selioutsky, 409 F.3d 114, 119 (2d Cir. 2005) (internal citations
omitted).
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