United States v. Hall ( 2008 )

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
2-8-2008
USA v. Hall
Precedential or Non-Precedential: Precedential
Docket No. 07-2373
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 07-2373
UNITED STATES OF AMERICA
v.
NEAL HALL,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(E.D.Pa. Crim. No. 06-cr-00160-2)
District Judge: Honorable Paul S. Diamond
Submitted under Third Circuit LAR 34.1(a)
December 14, 2007
BEFORE: RENDELL, GREENBERG, and
VAN ANTWERPEN, Circuit Judges
(Opinion filed February 8, 2008)
Peter Goldberger
Pamela A. Wilk
50 Rittenhouse Place
Ardmore, PA 19003-2276
Attorneys for appellant
Patrick L. Meehan
United States Attorney
Robert A. Zauzmer
Assistant United States Attorney
Chief of Appeals
Karen L. Grigsby
Assistant United States Attorney
615 Chestnut Street, Suite 1250
Philadelphia, PA 19106
Attorneys for appellee
OPINION OF THE COURT
GREENBERG, Circuit Judge.
I. INTRODUCTION
This matter comes on before this court on an appeal from
a judgment of conviction and sentence entered on March 21,
2007, on a plea of guilty in the District Court. The Government
initiated the case on April 5, 2006, when it filed an information
against appellant Neal Hall (“Hall”) and his wife, Blonde
Grayson-Hall (“Grayson-Hall”), charging them each with three
counts of willful failure to file income tax returns in violation of
26 U.S.C. § 7203. On May 16, 2006, Hall and his wife, pursuant
to plea agreements, entered pleas of guilty to each of the three
counts of the information. On March 21, 2007, the District
Court sentenced each defendant to a 12-month custodial term to
be followed by 12-month terms of supervised release.
Moreover, the court imposed a $20,000 fine on each defendant.
Hall now challenges the procedure the District Court followed
when he entered his plea and also challenges the sentence the
court imposed. In particular, Hall contends that when he entered
his plea of guilty the court failed to exercise the “special care”
required during colloquies in cases involving tied plea
agreements (usually called “package deal agreements”), the
Government breached its promise in the plea agreement to
2
“[m]ake no recommendation as to the sentence,” and the court
imposed an unreasonably long custodial sentence on him.
Grayson-Hall has not appealed.
II. FACTS AND PROCEDURAL HISTORY
Hall, an ophthalmologist, and Grayson-Hall, an attorney,
are residents of Philadelphia, Pennsylvania. During the times
germane to these proceedings Hall operated Ophthalmic
Associates, Inc. d/b/a Flourtown Eye Associates and Milan
Designer Eyewear in Flourtown, Pennsylvania, and Wilmington
Eye Associates in Delaware, and Grayson-Hall practiced law
through Hall & Associates, LLC, a law firm in Philadelphia. In
1986, Hall incorporated Ophthalmic Research Associates
(“ORA”), a non-profit organization in West Chester,
Pennsylvania, with Hall as its chairperson and Grayson-Hall as
its secretary and treasurer.
The Government’s information charged that defendants
willfully failed to file income tax returns for 1999, 2000, and
2001. After negotiations through separate attorneys, defendants
entered into tied plea agreements with the Government, each
agreement being conditioned on the entry of a guilty plea by the
other defendant. Among other terms the Government’s plea
agreement with Hall included the following provision:
7. At the time of sentencing, the government will:
a. Make no recommendation as to the sentence.
b. Comment on the evidence and circumstances of the case;
bring to the Court’s attention all facts relevant to sentencing
including evidence relating to dismissed counts, if any, and to
the character and any criminal conduct of the defendant;
address the Court regarding the nature and seriousness of the
offense; respond factually to questions raised by the Court;
correct factual inaccuracies in the presentence report or
sentencing record; and rebut any statement of facts made by
3
or on behalf of the defendant at sentencing.
c. Nothing in this agreement shall limit the government in its
comments in, and responses to, any post-sentencing matters.
App. at 5-6. Grayson-Hall’s plea agreement, however, did not
prohibit the Government from making a recommendation as to
her sentence. As will be seen this distinction is at the core of
one of the issues Hall raises on this appeal.
On May 16, 2006, the District Court conducted a joint
plea hearing for defendants, who were present and represented
by separate attorneys throughout the hearing, pursuant to Federal
Rule of Criminal Procedure 11. That rule requires that before
accepting a plea of guilty the court must “determine that the plea
is voluntary and did not result from force, threats or promises
(other than promises in a plea agreement).” Fed. R. Crim. P.
11(b)(2). During the hearing, the court engaged in a colloquy
with Hall to determine whether his plea was voluntary that
included the following exchanges:
THE COURT: . . . Do you also understand that
I will ask you questions to satisfy myself that
you are competent and able to enter a plea, and
to satisfy myself that you are knowingly and
voluntarily giving up your rights in entering
this plea?
THE DEFENDANT: Yes.
THE COURT: If at any time you don’t
understand what I’m saying, you want to repeat
anything, please let me know, okay?
THE DEFENDANT: Yes.
THE COURT: And if at any time you want to
speak to your lawyer, Mr. Miller, you let me
know, we’ll take a continuance, and we’ll
recess this matter for as long as you need to
4
speak with your counsel, all right?
THE DEFENDANT: Yes, thank you.
* * *
THE COURT: You have an attorney?
THE DEFENDANT: Yes.
THE COURT: Mr. Miller?
THE DEFENDANT: Yes.
THE COURT: And have you had ample
opportunity to discuss your case with Mr.
Miller?
THE DEFENDANT: Yes.
THE COURT: And are you satisfied with Mr.
Miller’s representation of you?
THE DEFENDANT: Yes.
* * *
THE COURT: . . . Has anyone made any threats
or promises or assurances to you of any kind,
other than what is set forth in the plea
agreement to convince or induce you to plead
guilty in this case?
THE DEFENDANT: No.
* * *
THE COURT: Now, you have heard me discuss
with your wife the Government’s condition of this
case, that it would not negotiate [a] plea agreement
5
with only one of you, that either both of you pled
guilty or you both went to trial. You heard me
discuss that with her?
THE DEFENDANT: Yes.
THE COURT: And you have discussed that with
your counsel?
THE DEFENDANT: Yes.
THE COURT: And are you voluntarily and freely
electing to plead guilty, because you think, after
consulting with your lawyer, it is in your best
interest to do so?
THE DEFENDANT: Yes.
App. at 70, 72, 80-81. Following the District Court’s colloquies
with defendants it accepted their pleas of guilty to the three
counts of willful failure to file income tax returns.
On March 21, 2007, the District Court conducted a
sentencing hearing for both Hall and his wife. After the court
denied each defendant’s motion for a downward departure from
the applicable base offense level, it concluded that both had base
offense levels of 12 which, when combined with their criminal
history categories of I, yielded a sentencing range of 10 to 16
months.
The District Court then considered defendants’ motions
for variances pursuant to 18 U.S.C. § 3553.1 Grayson-Hall’s
attorney began the arguments on the motions by contending that
a variance would be appropriate because defendants had paid, or
were expected to pay, the amounts that they owed in taxes, and
1
Apparently the parties distinguished between departures
and variances by reason of our opinion in United States v. Vampire
Nation, 451 F.3d 189, 195 n.2 (3d Cir. 2006).
6
they would not in the future fail to file tax returns because they
had implemented a payroll service in their respective businesses
that would withhold taxes. Grayson-Hall’s attorney also referred
to defendants’ lifestyles, stating that “the Halls do not live a
lavish life style,” and that “[t]hey are by no measure wealthy.”
Supp. app. at 75. After Grayson-Hall’s attorney finished his
remarks, Grayson-Hall made a personal allocution.
Following Grayson-Hall’s allocution, Hall’s attorney
made his arguments in support of Hall’s motion for a variance.
He began by referring to his earlier arguments referencing Hall’s
charitable work and Grayson-Hall’s poor health. Hall’s attorney
then argued that a variance would be appropriate because “the
nature and circumstances of the offense” warranted one. Supp.
app. at 77. According to Hall’s attorney:
This is not a case and I think this is important,
because what I’m about to say really takes Dr.
Hall and for the [sic] matter, takes Mrs. Hall
outside the heartland of offenders who really
seek to cheat the Government out of taxes. This
is not a case about greed. This is not a case
about willful evasion. There is no evidence in
the record that any of the money that should
have gone to pay taxes was spent on luxury
items. Was spent on vacations or clothing or
cars or anything like that. That’s simply not the
case with both defendants.
Quite to the contrary, they live a very modest
life style. They have old cars, old clothes, a
home in need of repair. They’ve taken one
vacation in the last ten years. This is simply not
a case about greed. And for that matter, I
believe they fall outside, certainly Dr. Hall and
Mrs. Hall, for that matter, fall outside the
heartland of offenders who are seeking to cheat
the Government out of taxes, your Honor.
7
Id. Hall’s attorney also argued that a variance was appropriate
based on Hall’s payments of the taxes that he owed and his
acceptance of responsibility for his crimes.
After Hall’s attorney completed his argument, Hall gave
his allocution following which the Government responded to
both defendants’ arguments. Without specifying at the outset the
defendant to whom it was referring, the Government made the
following statement:
[Section] 3553(a) compels that we first look at
the nature and circumstances of the offense.
And make no mistake here, the offense is failure
to file returns. This is not a case before your
Honor of people who are being charged with
failure to pay all they owed, having filed a
return. People who couldn’t because of
juggling financial responsibilities, come good
on April 15th. This is a case where for ten
years, no tax returns were filed. This isn’t a
case of miscalculation. We filed a return. We
innocently thought that travel and entertainment
and car expenses were deductible and so we
deducted it in good faith. But it turns out, no,
that’s wrong, so we didn’t pay them.
This is a case where, for ten years, no tax
returns were filed. No taxes were paid. And
not just federally. No city wage, no state tax.
The only tax that has been paid here is property
tax, because otherwise, the bank comes and
takes your property.
A decision not to file a return is a decision that
you make every single day for ten years. Every
April 15th, when all your friends and colleagues
are talking about having to file, it’s a decision
that you know you are making. So, I think, first
of all, it’s important to look at the offense and
what the offense is. And the offense is fairly
8
stark.
Supp. app. at 82-83.
At this point, the Government distinguished between Hall
and his wife by stating: “addressing Blonde first and again, I will
just say for the record that my comments concerning Neal Hall
will be very limited, because I do not want to run afoul of
[United States v. Nolan-Cooper, 155 F.3d 221 (3d Cir. 1998)].”
Supp. app. at 83. The Government proceeded to discuss
Grayson-Hall’s assets. During that discussion, it stated:
I believe, she and Neal, between them have
either [sic] or nine accounts that have been
charged off and 11 that are in collection status
or vice versa. It’s a huge number of creditors
who have been stiffed, just like the
Government. It is a choice on their part. It is a
choice to own property and not pay taxes. It is a
choice to have hundreds of thousands of dollars
of income and not pay taxes.
Supp. app. at 84-85. The Government then prefaced its
subsequent arguments with the words “as to Blonde Hall,” supp.
app. at 85, and described Grayson-Hall’s educational and
professional background. The Government challenged her claim
that she did not know she owed taxes, arguing that “if she didn’t
believe she owned [sic] money . . . [she could have] file[d] the
tax returns showing no liability,” and that “[s]he didn’t do that,
because she knew she did owe [taxes] and she knew that the IRS
would reject her return as bogus.” Supp. app. at 86.
After arguing that Grayson-Hall’s statements concerning
her lack of knowledge were not credible, the Government
addressed defendants’ arguments concerning their charitable
works. The Government specifically addressed ORA, arguing:
ORA was this charity that Neal and Blonde Hall
started. And I think, significantly, in terms of
understanding that charity, it should be
9
understood that Neal acquired a building in his
name in West Chester, in his personal name.
The Halls, Blonde in particular, well, the Halls
then solicited donations for the renovation of
the building for the work of ORA. But they did
not disclose to the foundations and private
contributors, that this building was owned in his
name. So, in essence, they are getting charitable
contributions to improve a facility that he – a
building that he owns in his own name.
Supp. app. at 88. The Government argued that “what this money
did, they basically solicited charitable money to improve their
own station. To improve their own place in life, to improve their
own financial standing.” Supp. app. at 89. The Government
then added, “I think that also speaks to who Blonde Hall is as a
person, one of the factors under 3553(a).” Supp. app. at 89.
The Government concluded its response with the
following statement:
Finally, I want to just very briefly address
3553(a) [which] requires that the sentence that
you impose promote respect for the law and
provide adequate deterrence. I think that’s just
incredibly important in a white-collar crime.
People pay attention to crime [sic] likes [sic]
this. I’ve gotten a phone call from a doctor in
the community who read about this in the paper.
And wants to know what their sentence is when
they are sentenced.
You know, it calls to mind the statement of, was
it Leona Helmsly, taxes are for little people. In
other words, when you have the bus driver job,
the fireman job, the taxes are withheld. But
when you’re a doctor or a lawyer, do you have
to pay taxes? And is there a penalty if you
don’t. Is there a penalty beyond just, well, yes,
now your building’s appreciated all this much
10
and the IRS is going to take their penalty, but
maybe your real estate has appreciated more
than the IRS penalty is going to sock you for, so
you still come out ahead. Or maybe, you get
away with it entirely, in this case, because we
are past the Statute of Limitations for some of
the years. There will be no penalty for some of
the years for which no returns were filed and no
taxes paid.
So, I think that in terms of the public’s
perception of whether or not this is a significant
crime, it’s necessary to have a sentence of
imprisonment. And Mr. Nastasi [Grayson-
Hall’s counsel] is right, I am asking for the top
of the guidelines as to Blonde Hall. It’s
necessary to have a significant sentence of
imprisonment to show people that, yes, you
really do have to file your returns and pay taxes.
It really is a significant crime. It may be white
collar. Maybe nobody gets hurt. Maybe, you
know, there’s no gun, no threat of violence. But
it has a significant impact. And it is a
significant crime.
Supp. app. at 89-90. The Government added that “for those
reasons, . . . as to Blonde Hall, I do ask for a sentence at the top
of the guidelines. And as to Neal Hall, consistent with the
government’s plea agreement, it makes no recommendation.”
Supp. app. at 90.
Following the Government’s argument, the District Court
sentenced Grayson-Hall to 12 months imprisonment and an
additional 12 months of supervised release, and imposed a fine
of $20,000. The District Court then sentenced Hall. The court
observed that he is “a highly educated, highly intelligent man
[who has] acknowledged that [he] knew [he was] obligated to
file tax returns” but “repeatedly failed to do so.” Supp. app. at
100. Among the District Court’s considerations was “the need
for the sentence imposed to reflect the seriousness of the
11
offenses to which [Hall] pled guilty to promote respect for the
law,” “[t]o provide just punishment,” “[t]o afford adequate
deterrence to criminal conduct and to protect the public from any
further crimes.” Supp. app. at 100-01. Although the court noted
that it “[did] not believe [Hall] will commit any other crimes,” it
stated that it “believe[d] that [Hall] brought the law into
disrespect when a licensed doctor simply fails to file tax returns
for year after year after year.” Supp. app. at 101. The District
Court explained that it “believe[d] a sentence of incarceration is
a [sic] essential to promote respect for the law and to provide an
adequate deterrence in these circumstances.” Id. The court then
imposed a sentence of 12 months imprisonment, followed by 12
months of supervised release, and a fine of $20,000, the same
sentence that it imposed on Grayson-Hall. The District Court
entered judgment against Hall on the same date, March 21, 2007.
Hall then timely appealed.
III. JURISDICTION AND STANDARDS OF REVIEW
The District Court had subject matter jurisdiction over
this matter pursuant to 18 U.S.C. § 3231. We have jurisdiction
pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). Hall
challenges both the entry of his plea and the imposition of his
sentence. With respect to the entry of his plea we evaluate the
plea colloquy for plain error because he did not object in the
District Court. See United States v. Vonn, 535 U.S. 55, 62-63,
122 S. Ct. 1043, 1048 (2002). Our review of the question of
whether the Government breached its plea agreement with Hall
is plenary even though he did not object at the time of the
alleged breach. See United States v. Hodge, 412 F.3d 479, 484-
85 (3d Cir. 2005). We review Hall’s sentence on an abuse of
discretion basis. See Gall v. United States, 128 S. Ct. 586, 594
(2007).
IV. DISCUSSION
12
We begin by noting that even though Hall’s plea
agreement included a conditional waiver of his right to appeal,
the Government has not moved to affirm summarily the appeal
or even to limit its scope. We further observe that we “retain[]
subject matter jurisdiction over [an] appeal by a defendant who
ha[s] signed an appellate waiver.” United States v. Gwinnett,
483 F.3d 200, 203 (3d Cir. 2007). Accordingly, inasmuch as the
Government addresses Hall’s arguments on the merits, and we
have jurisdiction, we will do the same notwithstanding Hall’s
waiver of the right to appeal.
A. Did the District Court exercise “special care”
in determining whether Hall’s plea, which was tied
to Grayson-Hall’s plea, was voluntary?
Hall argues that the District Court failed to exercise the
“special care” required in determining whether his plea which he
entered as part of a tied plea agreement with the Government
was voluntary. See Hodge, 412 F.3d at 488. But he does not
contend that he made this objection during the District Court’s
colloquy at the plea hearing. Thus, as we indicated above, we
review Hall’s special care contention bearing in mind that “a
defendant who fails to object to Rule 11 error must carry the
burden of showing on appeal that the error was ‘plain,
prejudicial, and disreputable to the judicial system.’” Id. (quoting
Vonn, 535 U.S. at 65, 122 S. Ct. at 1050). In a plain error
context, “a defendant must show that: (1) an error was
committed; (2) the error was plain, that is, clear and obvious;
and (3) the error affected the defendant’s substantial rights.” Id.
(internal quotation marks omitted). “When those elements are
satisfied, an appellate court in its discretion may order a
correction if the error seriously affects the fairness, integrity, or
public reputation of judicial proceedings.” Id. (internal
quotation marks omitted). “[A] defendant who seeks reversal of
his conviction after a guilty plea, on the ground that the district
court committed plain error under Rule 11, must show a
reasonable probability that, but for the error, he would not have
entered the plea.” United States v. Dominguez Benitez, 542
U.S. 74, 83, 124 S. Ct. 2333, 2340 (2004).
13
We have explained that there is a “package deal plea
bargain[ ] [when] the government accepts a defendant’s guilty
plea on the condition that his co-defendant(s) also plead guilty.”
Hodge, 412 F.3d at 489. As we indicated in Hodge, “[t]here is
no question that package deal plea bargains are constitutional,” a
“nearly axiomatic [conclusion] given the nature of our criminal
justice system, of which plea bargains are an essential part.” Id.
at 490 (internal quotation marks omitted). Yet we also have
observed that tied plea agreements “pose special risks,
particularly when a trial court is unaware that defendants’ pleas
are tied together.” Id. Accordingly, to address the risks
associated with tied plea agreements, we require that “(1)
package plea deals be disclosed to the court and (2) colloquies
with package plea participants be conducted with special care.”
Id. at 489-90.
We have discussed the general terms of what constitutes
“special care” in the context of a plea colloquy involving tied
plea agreements:
At the threshold, a district court notified of a
package deal plea bargain should question
counsel closely to ensure that the precise terms
of the package plea deal are on the record.
Once it is clear exactly how a defendant’s plea
benefits his confederate(s), it may be helpful to
ask who first proposed the package deal, how
extensively defense counsel was involved in
developing the deal, and what benefit the
defendant expects to gain from the deal. When
asking whether a plea is a product of force,
threats, or inducements and the like, a district
court should take care not to ask only whether
the prosecutor forced, threatened, or coerced the
defendant, but whether anyone did so. Having
so inquired, the court should be particularly
attuned to even mild expressions of reluctance
by a defendant. Such expressions always
should trigger a more searching inquiry. On the
other hand, as none of the defendants may be
14
particularly eager to plead guilty, one
defendant’s expressions of reluctance should be
compared to those of other defendants involved
in the package deal.
Id. at 491-92 (internal citations omitted). We made clear,
however, that this set of questions “is not a checklist that, if
followed, automatically will prevent a Rule 11 colloquy from
going awry,” but instead “is a summary of lessons drawn from
colloquies evaluated by other Courts of Appeals.” Id. at 492.
“The overarching rule is that a district court considering a
package plea deal should be particularly attentive to a
defendant’s responses to voluntariness questions throughout a
plea colloquy.” Id. “That being said, district courts of course
should remember that package deal plea bargains are not
inherently coercive, and that the judge’s goal is not to doom the
deal but simply to ensure that the defendant’s plea is voluntary.”
Id.
The record shows that the District Court was aware that
Hall entered his plea as part of a tied plea agreement, and that it
adequately exercised the “special care” required in determining
that his plea was voluntary. Hall is a well-educated individual
who graduated from a leading university and thereafter obtained
his medical degree from a medical school at another leading
university. Moreover, his attorney during the plea negotiations
and at the plea hearing was separate from and independent of his
wife’s attorney. During his colloquy, the court asked whether
anyone had made threats against Hall or promises to him to
induce his plea, to which he replied “No.” App. at 80. It then
asked Hall whether “[you are] voluntarily and freely electing to
plead guilty, because you think, after consulting with your
lawyer, it is in your best interest to do so,” to which Hall
responded “Yes.” App. at 80-81. The court confirmed that Hall
had had the opportunity to consult with his attorney, who
represented only him and not Grayson-Hall. Indeed, Hall
demonstrated his awareness of his opportunity to consult with
his attorney when, during the Government’s presentation of the
factual basis for his plea, he asked the court for permission to
talk with his attorney privately, who subsequently clarified a
15
factual point that the Government previously had made. There is
no indication in the record that Hall expressed “even mild
expressions of reluctance” at any point during the plea hearing.
Hodge, 412 F.3d at 492.
Hall argues that the District Court’s questions concerning
his plea deviated from those that we have recommended that a
court ordinarily should use in considering guilty pleas when
there are tied plea agreements. He fails, however, to give any
reason for us to suspect that he did not make his plea knowingly
and voluntarily.2 Although the District Court did not ask Hall all
of the questions that we suggested as examples in Hodge for a
court to use when considering a package plea agreement, we
have noted the Supreme Court’s admonition that “[t]he nature of
the inquiry required by Rule 11 must necessarily vary from case
to case,” McCarthy v. United States, 394 U.S. 459, 467 n.20, 89
S. Ct. 1166, 1171 n.20 (1969), and that “Rule 11 should not be
given such a crabbed interpretation that ceremony was exalted
over substance,” Vonn, 535 U.S. at 70, 122 S.Ct. at 1052
(internal quotation marks omitted); see Hodge, 412 F.3d at 491.
We have emphasized that the set of questions that we suggested
in Hodge “is not a checklist,” but rather “a summary of lessons,”
and that “[t]he overarching rule is that a district court
considering a package plea deal should be particularly attentive
to a defendant’s responses to voluntariness questions throughout
a plea colloquy.” Hodge, 412 F.3d at 492.
Hall does not explain, at least not convincingly, how
answers to questions that we suggested in Hodge that the District
2
In fact, we note that when asked by the District Court
whether his responses in his sentencing memorandum were
inconsistent with his acceptance of responsibility and his desire to
plead guilty, Hall filed a statement with the court confirming his
willingness to plead guilty. Additionally, the District Court noted
that “[e]ach Defendant’s demeanor and the manner in which he or
she answered my questions confirmed my belief that Mr. and Mrs.
Hall did not wish to lose the benefits of their plea agreement and
so were most willing to plead guilty.” App. at 36-37.
16
Court did not ask in this case would have been particularly
helpful in a determination of whether he entered his plea
knowingly and voluntarily. In fact, we are satisfied that the
answers to the unasked suggested Hodge questions were not
necessary in light of the proceedings before the District Court.
For example, although the court did not ask Hall how he stood to
benefit from pleading guilty, the Government answered that
question by informing the court that “as of this agreement, the
defendant has demonstrated acceptance of responsibility, making
him eligible for a two-level downward adjustment.” App. at 79.3
In short, Hall has not identified evidence showing that there is “a
reasonable probability that, but for the [claimed] error, he would
not have entered the plea.” Dominguez Benitez, 542 U.S. at 83,
124 S.Ct. at 2340.
In reaching our conclusion on the voluntariness question
we are struck by the fact that even though Hall on this appeal is
being represented by experienced counsel who did not represent
him in the District Court he does not flat out claim that his guilty
plea was not voluntary. While we recognize that he does not
have to do so inasmuch as Dominguez Benitez speaks of a
reasonable probability, rather than a certainty, of involuntariness,
still it might be expected that he would make that claim
unequivocally. Instead, he indicates that “there is good reason to
believe [his guilty plea] was not [voluntary],” appellant’s br. at
21, this case had the “potential for involuntariness,” id., and
3
Clearly we cannot know if Hall at a trial would have had a
viable defense in this case. Yet in view of his professional status,
substantial income, and the ordinarily uncomplicated nature of a
willful failure to file an income tax return case we cannot help but
believe that he was in a difficult position and stood to benefit by
negotiating a plea agreement and accepting responsibility. We
make this observation even though we are aware that a defendant
does not necessarily lose a 2-level acceptance of responsibility
adjustment merely because he pleads not guilty. Rather, we do so
because our experience teaches us that a defendant who pleads
guilty is more likely to receive an acceptance of responsibility
adjustment than a defendant convicted at trial.
17
there was “a substantial probability that [his] plea was
involuntarily entered,” id. at 27.
In fact the closest he comes to suggesting that there is a
basis for believing that his plea might have been involuntary is
his point that while his wife, who is an attorney, “benefitted
substantially from the limitations of her plea, it is not nearly so
clear that [he] faced any significant criminal exposure beyond
that to which he pleaded guilty” and that “[s]ituations like this
are rife with the potential for involuntariness.” Id. at 20-21. To
this point Hall adds that if questioned closer he “might well have
revealed that he was pleading guilty solely because of the ‘tied’
nature of his wife’s deal with the government, although he
himself had little if anything to gain.” Id. at 26.
We, however, reject as a matter of law a conclusion that a
defendant who pleads guilty with his or her jointly charged
defendant, whether or not his or her spouse, merely by entering
that plea no matter how much it benefits the other defendant and
how little it benefits the defendant challenging the plea has acted
involuntarily. Moreover, in this case there is a special reason to
reject the theory that a tied plea agreement is involuntary merely
because the defendants receive unequal benefits from it because
Hall’s co-defendant, who benefitted from his guilty plea, just as
he may have benefitted from her guilty plea, is as different as
can be from the type of co-defendants in many of the cases we
see and hardly would have been likely to have threatened or
coerced Hall into entering a plea of guilty. We do not
understand how a court could regard a guilty plea as involuntary
merely because the defendant pleading guilty assisted his or her
spouse more than he assisted himself or herself for it is natural
that a defendant would want to assist his or her spouse.4 In any
event a conclusion that tied pleas with unbalanced benefits are
suspect inevitably would doom tied plea agreements as that
approach frequently would open up such agreements to
involuntariness challenges on the basis of an after-the-fact
4
The presentence report described defendants’ marriage as
intact.
18
analysis of the comparative benefits to the defendants of the tied
plea agreements.
On the record, then, we conclude that the District Court
exercised the “special care” required in its colloquy concerning
the voluntariness of Hall’s plea, and accordingly we find no
error in its acceptance of his plea.
B. Did the Government breach its plea agreement
with Hall requiring that it “[m]ake no
recommendation as to the sentence,” by arguing
that Hall’s failure to file tax returns, to which both
Hall and his co-defendant pleaded guilty,
warranted a sentence of imprisonment?
Hall contends that the Government breached its plea
agreement with him by making prohibited statements during the
sentencing hearing. The plea agreement provided that the
Government would “[m]ake no recommendation as to the
sentence,” but was allowed to “[c]omment on the evidence and
circumstances of the case,” “bring to the Court’s attention all
facts relevant to sentencing including evidence relating to . . . the
character and any criminal conduct of the defendant,” and
“address the Court regarding the nature and seriousness of the
offense . . . .” App. at 5-6. Hall argues that the Government
breached the agreement by arguing that the court should impose
a sentence of imprisonment on him. The Government responds
that its comments that Hall challenges pertained to Grayson-Hall
rather than to him.
In determining whether the Government has breached its
plea agreement with a defendant, we apply the de novo standard
of review. United States v. Rivera, 357 F.3d 290, 293-94 (3d
Cir. 2004). To the extent, however, that parties dispute the facts
of a case, we review the District Court’s findings of fact for
clear error. United States v. Moscahlaidis, 868 F.2d 1357, 1360
(3d Cir. 1989). In this case, we do not predicate our
determination on the District Court’s findings of fact and thus
our review is plenary.
19
The rules for enforcing plea agreements are well
established. “[W]hen a plea rests in any significant degree on a
promise or agreement of the prosecutor, so that it can be said to
be part of the inducement or consideration, such promise must
be fulfilled.” Santobello v. New York, 404 U.S. 257, 262, 92
S. Ct. 495, 499 (1971). “Because the defendant, by entering into
the plea, surrenders a number of [his] constitutional rights,
‘courts are compelled to scrutinize closely the promise made by
the government in order to determine whether it has been
performed.’” United States v. Nolan-Cooper, 155 F.3d 221, 236
(3d Cir. 1998) (quoting United States v. Hayes, 946 F.2d 230,
233 (3d Cir. 1991)).
In determining whether the Government has breached a
plea agreement, a court “must determine ‘whether the
government’s conduct is inconsistent with what was reasonably
understood by the defendant when entering the plea of guilty.’”
Id. (quoting United States v. Badaracco, 954 F.2d 928, 939 (3d
Cir. 1992)). “Accordingly, we will not permit the government to
rely upon a ‘rigidly literal’ approach to the construction of the
terms of the plea agreement.” Id. (quoting Moscahlaidis, 868
F.2d at 1361).
Although “[t]he government need not endorse the terms
of its plea agreements enthusiastically,” Badaracco, 954 F.2d at
941 (internal quotation marks omitted), it nonetheless “must
adhere strictly to the terms of the bargain it strikes with
defendants.” Moscahlaidis, 868 F.2d at 1361 (internal quotation
marks omitted). “[T]he doctrine that the government must
adhere to its bargain in the plea agreement is so fundamental that
even though the government’s breach is inadvertent and the
breach probably did not influence the judge in the sentence
imposed, due process and equity require that the sentence be
vacated.” Nolan-Cooper, 155 F.3d at 236 (internal quotation
marks omitted). If we find that the Government has breached its
plea agreement, we “remand the case to the district court for it to
determine whether to grant specific performance or allow
withdrawal of the plea.” Moscahlaidis, 868 F.2d at 1363.
Here, as we have indicated, the Government promised to
20
“[m]ake no recommendation as to the sentence,” rather than take
no position regarding Hall’s sentence. App. at 5. We have
pointed out that “[t]he difference between [making a
recommendation and taking a position] is elementary, for the
promise not to recommend is narrow, speaking only as to the
sentence to be imposed, whereas a promise to take no position
speaks to no attempt at all to influence the defendant’s
sentence.” United States v. Miller, 565 F.2d 1273, 1275 (3d Cir.
1977). Nevertheless, though the distinction between making a
“recommendation” and taking a “position” may be elementary in
its articulation, it may be difficult to determine in a particular
case whether the Government at the sentencing made a
recommendation or took a position.
The Government acknowledges that if it had contended
that the court should impose a sentence of imprisonment on Hall
it would have breached its plea agreement. But the Government
argues that it directed its statement that the court should impose
a sentence of imprisonment solely to Grayson-Hall. Of course,
if we conclude that the Government directed its recommendation
of a sentence of imprisonment at Hall, it would not matter
whether it did so “inadvertent[ly],” or whether the statements
“influence[d] the judge in the sentence imposed . . . .” Nolan-
Cooper, 155 F.3d at 236.
At the sentencing hearing, after briefly discussing the
circumstances of the case, as it was permitted to do under the
plea agreement, the Government noted that almost all of the rest
of its comments would pertain to Grayson-Hall. The
Government’s comments strongly suggest that it was aware that
it could make no sentencing recommendation as to Hall: “I will
just say for the record that my comments concerning Neal Hall
will be very limited, because I do not want to run afoul of
Nolan[-]Cooper.” Supp. app. at 83. After making this
statement, the Government proceeded to address Grayson-Hall’s
role in the crimes and her circumstances relevant to § 3553. Id.
at 83-89.
Towards the end of its comments at the hearing, the
Government argued:
21
Finally, I want to just very briefly address
3553(a) [which] requires that the sentence that
you impose promote respect for the law and
provide adequate deterrence. I think that’s just
incredibly important in a white-collar crime.
People pay attention to crime [sic] likes [sic]
this.
* * *
Is there a penalty [for not paying taxes] beyond
just, well, yes, now your building’s appreciated
all this much and the IRS is going to take their
penalty, but maybe your real estate has
appreciated more than the IRS penalty is going
to sock you for, so you still come out ahead. Or
maybe, you get away with it entirely, in this
case, because we are past the Statute of
Limitations for some of the years. There will be
no penalty for some of the years for which no
returns were filed and no taxes paid.
* * *
So, I think that in terms of the public’s
perception of whether or not this is a significant
crime, it’s necessary to have a sentence of
imprisonment.
Id. at 89-90. After making these statements, the Government
for the first time in the hearing made an explicit recommendation
as to sentencing: “So, I think that in terms of the public’s
perception of whether or not this is a significant crime, it’s
necessary to have a sentence of imprisonment.” Id. at 90. The
Government followed that statement by noting that it was asking
for a sentence of imprisonment at the “top of the guidelines as to
Blonde Hall.” Id. The Government then added:
22
It’s necessary to have a significant sentence of
imprisonment to show people that, yes, you
really do have to file your returns and pay taxes.
It really is a significant crime. It may be white
collar. Maybe nobody gets hurt. Maybe, you
know, there’s no gun, no threat of violence. But
it has a significant impact. And it is a
significant crime.
Id. In concluding its remarks, the Government stated that, “as to
Blonde Hall, I do ask for a sentence at the top of the guidelines.
And as to Neal Hall, consistent with the Government’s plea
agreement, it makes no recommendation.” Id.
The Government therefore described the failure to file tax
returns as a “significant crime” after it stated that “in terms of
the public’s perception of whether or not this is a significant
crime, it’s necessary to have a sentence of imprisonment.” Id.
In arguing that the court’s sentence must “reflect the seriousness
of the offense,” “promote respect for the law,” and “afford
adequate deterrence,” 18 U.S.C. § 3553(a)(2)(A)-(B), the
Government argued that a sentence of imprisonment was
necessary because of the significance of the crime. Though we
are satisfied that in making this argument the Government made
statements concerning “the nature and seriousness of the
offense” that it as well as anyone else reasonably could have
regarded as being within the bounds of the plea agreement, Hall
suggests that the statements might be viewed as constituting a
“recommendation as to the sentence” that the agreement
precluded.
But, as we have indicated, the Government argues that
given how the District Court entertained defendants’ respective
arguments, the Government directed its statements concerning
the seriousness of their crimes and the need for a sentence of
imprisonment only at Grayson-Hall. There are obvious
difficulties with this contention because defendants committed
the same offenses in the same way and, in every sense of the
23
term, were joint defendants. Indeed, as Hall points out, the
crime was “the same . . . for both defendants.” Appellant’s br. at
17. Thus, when the Government addressed the deliberate and
serious nature of the crime of failing to file a tax return, it
inevitably was addressing the conduct of both defendants. In
this regard we note that after both defendants had made their
allocutions the Government stated that:
[Section] 3553(a) compels that we first look at
the nature and circumstances of the offense.
And make no mistake here, the offense is failure
to file returns. This is not a case before your
Honor of people who are being charged with
failure to pay all they owed, having filed a
return. People who couldn’t because of
juggling financial responsibilities, come good
on April 15th. This is a case where for ten
years, no tax returns were filed. This isn’t a
case of miscalculation. We filed a return. We
innocently thought that travel and entertainment
and car expenses were deductible and so we
deducted it in good faith. But it turns out, no,
that’s wrong, so we didn’t pay them.
This is a case where, for ten years, no tax
returns were filed. No taxes were paid. And
not just federally. No city wage, no state tax.
The only tax that has been paid here is property
tax, because otherwise, the bank comes and
takes your property.
A decision not to file a return is a decision that
you make every single day for ten years. Every
April 15th, when all your friends and colleagues
are talking about having to file, it’s a decision
that you know you are making. So, I think, first
of all, it’s important to look at the offense and
what the offense is. And the offense is fairly
stark.
24
Supp. app. at 82-83. After the foregoing comments, however, as
noted above, the Government did distinguish between
defendants, stating that it would address Grayson-Hall’s role in
the crime first and that its comments with regard to Hall were
limited by Nolan-Cooper. Id. at 83. The Government then
discussed Grayson-Hall’s income and assets, after which it
stated:
I believe, she and Neal, between them have
either [sic] or nine accounts that have been
charged off and 11 that are in collection status
or vice versa. It’s a huge number of creditors
who have been stiffed, just like the
Government. It is a choice on their part. It is a
choice to own property and not pay taxes. It is a
choice to have hundreds of thousands of dollars
of income and not pay taxes.
Id. at 84-85.
The circumstances of this case ensured that though much
of the Government’s argument concerning the nature of the
crimes did not refer expressly to either Hall or Grayson-Hall, in
effect the Government inevitably referred to both defendants
inasmuch as they committed the same crime in precisely the
same way. Thus, when the Government argued that “in terms of
the public’s perception of whether or not this is a significant
crime, it’s necessary to have a sentence of imprisonment,” id. at
90, despite the Government’s earlier admonishments that its
comments pertained to Grayson-Hall, it may have been
somewhat difficult to distinguish between defendants.
Furthermore, even the mitigating circumstances of the case, for
example defendants’ lifestyles, largely were the same. The fact
is that the Government in its comments could not draw the line
between defendants with surgical precision though it did try to
make clear to the District Court that its comments were in
reference to Grayson-Hall only. It is understandable that it had
this difficulty for even Hall’s attorney could not, or at least did
not, draw a fine line between defendants when addressing the
court at sentencing, for he pointed out that his arguments in
25
favor of leniency applied to both of them.
It is, however, highly significant that Hall’s attorney
proposed and consented to having Grayson-Hall sentenced first.
Although the Government acknowledges that it did not
distinguish between defendants during much of its section
3553(a) argument, it argues that it was unnecessary to do so
given the manner in which the District Court conducted the
hearing and Hall’s consent to the arrangement. The Government
contends that “the district court conducted each phase of the
[sentencing] hearing jointly, but always addressed Mrs. Hall
first,” and that “[n]o one objected to this format.” Appellee’s br.
at 25-26. The Government notes that prior to sentencing, Hall’s
attorney wrote a letter to the District Court informing it that “Mr.
Nastasi [attorney for Grayson-Hall] and I have conferred and
respectfully request that the Court proceed first with Mrs.
Grayson-Hall’s sentencing, followed by Mr. Hall’s sentencing.”
Supp. app. at 1. Thus, the Government’s brief is fair when it
points out that “it was Dr. Hall’s counsel who asked the court to
sentence Mrs. Hall first, . . . thereby ensuring that the court
would hear the government’s ardent advocacy concerning Mrs.
Hall before it imposed sentence on Dr. Hall.” 5 Appellee’s br. at
39. The Government further contends that while “the district
court provided a single opportunity for allocution,” “the
government used that opportunity to speak extensively about
Mrs. Hall and to say virtually nothing about Dr. Hall.” Id. at 38.
5
In the unusual situation here in which defendants were so
similarly situated but the Government could make a sentencing
recommendation only as to Grayson-Hall, it might have been better
for the District Court to hear Hall’s arguments first and sentence
him before hearing her arguments and then sentencing her.
Obviously, however, we could not find that it erred in not doing so
inasmuch as Hall did not request that the court follow that
procedure, and we could not regard its failure to do as a plain error.
Indeed, if the court erred in proceeding as it did at sentencing,
inasmuch as it followed Hall’s request in sentencing his wife first
its error would have been an almost unreviewable invited error.
See United States v. Console, 13 F.3d 641, 660 (3d Cir. 1993).
26
We emphasize that even though in addressing the
sentence recommendation issue we naturally primarily have
discussed those statements by the Government that could be
considered as recommending a sentence for Hall, most of the
Government’s argument concerning the 18 U.S.C. § 3553(a)
sentencing factors undoubtedly was consistent with its plea
agreement with Hall, either because the Government plainly
directed its statements to Grayson-Hall or because the statements
concerned Hall’s “character and any criminal conduct,” which
his plea agreement permitted. App. at 5. For example, the
Government notes that it “spoke at length concerning the other
Section 3553(a) factors as they concerned Mrs. Grayson-Hall
barely mentioning Dr. Hall’s name, and only doing so in the
context of a reference to her credit card debt (the [presentence
report] did not distinguish her debt from his) and her activities at
ORA (which, factually, were joint activities with him) . . . .”
Appellee’s br. at 29. Thus, the parties agree that the
Government’s comments regarding Hall in its discussion of
Grayson-Hall’s involvement with ORA would not constitute a
breach of its plea agreement with Hall because they constitute
“facts relevant to sentencing including evidence relating . . . to
the character and any criminal conduct of the defendant . . . .”
App. at 5; see appellee’s br. at 34; appellant’s br. at 15. For that
same reason, we also note that the Government’s comments
regarding Hall in discussing defendants’ assets did not violate
Hall’s plea agreement.
In retrospect Hall may have been unrealistic to expect, if
he did so, that the Government’s statements regarding Grayson-
Hall’s sentence would not have the capacity to impact on the
court when it considered his sentence. In fact, Hall likely should
have expected that, in light of the plea agreement reached by his
wife and the identical role in the crimes played by Hall and
Grayson-Hall, the Government would be making
recommendations and comments as to Grayson-Hall that could
affect him. There is no escape from the reality that this case
differs from criminal cases such as drug trafficking conspiracies
in which different defendants may have different roles in the
offenses and may have different criminal records so that a
recommendation as to one defendant will have limited or no
27
effect on the case of another defendant. Hall and his wife
committed identical offenses in identical ways and each could
point to the same mitigating sentencing factors on his or her own
behalf. Nonetheless, Hall proposed and consented to the manner
in which his sentencing occurred, i.e., in a joint proceeding in
which Grayson-Hall would be sentenced first, which gave rise to
the possibility that comments meant to refer to his wife could be
taken as referring to his situation as well. Hall’s express request
for and consent to this arrangement, when taken in conjunction
with the Government’s explicit recognition of the terms of Hall’s
plea agreement and its statement that it was limiting its
sentencing comments to Grayson-Hall, leads us to conclude that
the Government’s comments did not constitute a sentencing
recommendation for Hall. In the circumstances, we find no
error, or at least no plain error, in the court’s acceptance of
Hall’s proposed arrangement, and we are satisfied that the
Government did not breach the plea agreement by making a
recommendation as to Hall’s sentence.
C. Was the District Court’s sentence of Hall to a
one-year custodial term unreasonable?
Hall argues that his sentence, which fell within the range
recommended by the Sentencing Guidelines, was unreasonable
because the Guidelines, which “evaluate tax felonies with an
element of fraud exactly the same as they do tax misdemeanors
which involve no more than a willful neglect of a known
statutory filing duty,” are unreasonable. Appellant’s br. at 28.
Hall further argues that his prison sentence of one year was
unreasonably high when compared to national statistics
concerning sentences for tax evasion. After our review of this
matter and our consideration of the Supreme Court’s recent
sentencing pronouncements in Gall v. United States, 128 S. Ct. at
586, as well as its earlier decisions and our own precedents, we
are satisfied that we cannot hold that the District Court abused
its discretion in the imposition of the sentence and thus we
cannot disturb it.
28
V. CONCLUSION
For the foregoing reasons we will affirm the judgment of
conviction and sentence entered March 21, 2007.
29