United States v. Bell (Brumer)

07-0715-cr(L)
USA v. Bell (Brumer)
1 UNITED STATES COURT OF APPEALS
2
3 FOR THE SECOND CIRCUIT
4
5 August Term, 2007
6
7
8 (Argued: May 29, 2008 Decided: June 10, 2008)
9
10 Docket No. 07-0715-cr(L), 07-0716-cr(con)
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12 - - - - - - - - - - - - - - - - - - - -X
13
14 UNITED STATES OF AMERICA,
15
16 Appellee,
17
18 - v.-
19
20 MICHAEL BRUMER AND LAWRENCE KLEIN
21 Defendants-Appellants
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23 - - - - - - - - - - - - - - - - - - - -X
24
25 Before: JACOBS, Chief Judge, CALABRESI and SACK,
26 Circuit Judges.
27
28 Appeal from judgments of conviction following guilty
29 pleas. Defendants argue that they are entitled to withdraw
30 their pleas because the government breached the plea
31 agreements and because of procedural defects in the
32 acceptance of the pleas. Defendant Klein also argues that
33 he was denied his Sixth Amendment right to counsel when the
34 district court refused to allow him to substitute counsel.
35 For the following reasons, we affirm.
1 JOHN W. MITCHELL, New York, NY,
2 for Defendants-Appellants.
3
4 ROBIN W. MOREY, Assistant United
5 States Attorney (Marcus A.
6 Asner, Celeste L. Koeleveld,
7 Assistant United States
8 Attorneys, on the brief), for
9 Michael J. Garcia, United States
10 Attorney for the Southern
11 District of New York, New York,
12 NY, for Appellee.
13
14 PER CURIAM:
15 Michael Brumer and Lawrence Klein appeal from judgments
16 entered in the United States District Court for the Southern
17 District of New York (Wood, J.) on January 12, 2007,
18 convicting them, after guilty pleas, of conspiracy to commit
19 mail fraud, health care fraud and making false statements
20 relating to health care matters, in violation of 18 U.S.C.
21 §§ 371, 1341, 1347 and 1035; health care fraud, in violation
22 of 18 U.S.C. §§ 1347 and 2; and conspiracy to violate the
23 Medicare anti-kickback statute, 42 U.S.C. §§ 1320a-7b(b)(1)
24 and 1320a-7b(b)(2), in violation of 18 U.S.C. § 371.
25 I.
26 On appeal, defendants seek to withdraw their guilty
27 pleas principally on the ground that the government breached
28 the plea agreements’ provision requiring the parties to
29 forbear from offering certain sentencing arguments. The
30 government argued for sentence enhancements based on
31 vulnerable victims and use of mass marketing, but claims it
2
1 did so only in response to a breach by defendants, who
2 sought a Fatico hearing on the intended loss amount. We
3 review plea agreements de novo and in accordance with
4 principles of contract law. United States v. Griffin, 510
5 F.3d 354, 360 (2d Cir. 2007). “To determine whether a plea
6 agreement has been breached, we ‘look[] to the reasonable
7 understanding of the parties as to the terms of the
8 agreement.’” United States v. Riera, 298 F.3d 128, 133 (2d
9 Cir. 2002) (quoting United States v. Colon, 220 F.3d 48, 51
10 (2d Cir. 2000). “When the Government breaches a plea
11 agreement, the defendant is entitled to either withdraw his
12 plea or have his agreement specifically performed.” United
13 States v. Cimino, 381 F.3d 124, 127 (2d Cir. 2004).
14 The plea agreements provided that “neither party will
15 seek [a downward or an upward] departure or seek any
16 adjustment not set forth herein. Nor will either party
17 suggest that the Probation Department consider such a
18 departure or adjustment, or suggest that the Court sua
19 sponte consider such a departure or adjustment.” As a
20 result of developments arising out of the trial of Brumer’s
21 and Klein’s co-defendants, the government offered to reduce
22 the intended loss amount from the range set forth in
23 Brumer’s and Klein’s plea agreements ($10 million to $20
24 million) to $5 million to $10 million. In so doing, the
3
1 government conducted itself in a way that reflected a
2 commitment to a fair outcome; its offer to amend the plea
3 agreements to benefit defendants was not a material breach
4 of those agreements. See New Windsor Volunteer Ambulance
5 Corps, Inc., v. Meyers, 442 F.3d 101, 117 (2d Cir. 2006)
6 (quoting Callanan v. Powers, 199 N.Y. 268, 284, 92 N.E. 747,
7 752 (1910), for the proposition that a breach is material
8 only if it is “‘so substantial and fundamental as to
9 strongly tend to defeat the object of the parties in making
10 the contract.”).
11 Brumer and Klein rejected the offer to amend the plea
12 agreements, advised the district court that the intended
13 loss amount was in dispute, and thereafter requested (and
14 obtained) a Fatico hearing on that issue. At the Fatico
15 hearing, the government lost the benefit of its bargain by
16 being put to its proof. The result was a significantly
17 lower loss amount with a corresponding impact on the
18 ultimate sentence. Defendants thus materially breached the
19 plea agreements, and having done so, relieved the government
20 of its obligations to comply with them. See United States
21 v. Byrd, 413 F.3d 249, 251 (2d Cir. 2005) (per curiam)
22 (“When the defendant is the party in breach, the government
23 is entitled to specific performance of the plea agreement or
24 to be relieved of its obligations under it.”).
4
1 The government was within its rights to treat the plea
2 agreements as unenforceable following the defendants’
3 material breach, and specifically to seek sentence
4 enhancements other than those stipulated. See Cimino, 381
5 F.3d at 128 & n.3 (concluding that defendant’s breach of
6 sentence advocacy prohibition gave government the option of
7 canceling plea agreement or being excused from its
8 reciprocal obligations); see also United States v. El-Gheur,
9 201 F.3d 90, 93-94 (2d Cir. 2000) (holding that defendant’s
10 breach of cooperation agreement absolved the government of
11 obligation to move for downward departure pursuant to
12 U.S.S.G. § 5K1.1); United States v. Merritt, 988 F.2d 1298,
13 1313 (2d Cir. 1993) (“[A] defendant who materially breaches
14 a plea agreement may not claim its benefits.” (citations
15 omitted)). Under the circumstances of this case, the
16 government’s sentence advocacy in contradiction of the plea
17 agreements did not entitle defendants to withdraw their
18 pleas.
19 The district court reached the same conclusion by a
20 different route. The district court ruled that defendants’
21 request for a Fatico hearing was not a breach, and that the
22 government’s sentence advocacy, if in breach, was moot
23 because the court did not consider it. As a result, the
24 district court imposed a sentence that relied on the lower
5
1 loss amount established at the Fatico hearing. The
2 government has not appealed the district court’s ruling on
3 breach, and therefore does not seek specific performance of
4 defendants’ obligations under the plea agreements.
5 Accordingly, although we disagree with the district court’s
6 ruling on breach, we affirm the convictions and sentences
7 imposed.
8 II
9 Brumer and Klein further argue they are entitled to
10 withdraw their pleas because of procedural defects in the
11 acceptance of their pleas, which were conducted by a
12 magistrate judge with defendants’ consent.
13 First, defendants argue that the district judge erred
14 when, outside their presence, she reviewed their plea
15 allocutions and signed the orders accepting those pleas.
16 Section 636(b)(3) of the Federal Magistrates Act permits
17 defendants to consent (as these defendant did) to entry of
18 their guilty pleas in front of a magistrate judge. See 28
19 U.S.C. § 636(b)(3) (permitting assignment of “such
20 additional duties as are not inconsistent with the
21 Constitution and laws of the United States”); see also
22 United States v. Williams, 23 F.3d 629, 632-34 (2d Cir.
23 1994) (holding that Magistrates Act authorizes district
24 court to refer plea allocution to magistrate provided
6
1 defendant consents). Defendants do not dispute that the
2 magistrate judge’s conduct of their plea allocutions
3 satisfied the requirements of Fed. R. Crim. P. 11(c).
4 Having consented to this procedure, defendants were not
5 entitled to be present when the district judge reviewed the
6 allocution transcripts and signed the orders accepting the
7 pleas. See United States v. Jones, 381 F.3d 114, 122 (2d
8 Cir. 2004) (right to be present “is triggered only when the
9 defendant’s ‘presence has a relation, reasonably
10 substantial, to the fullness of his opportunity to defend
11 against the charge,’ and there is no constitutional right to
12 be present ‘when presence would be useless, or the benefit
13 but a shadow’” (quoting Snyder v. Massachusetts, 291 U.S.
14 97, 105-07 (1934))).
15 Second, defendants argue that the district court
16 neglected the procedures of 28 U.S.C. § 636(b)(1) and
17 (b)(1)(C), which require, inter alia, filing of proposed
18 findings and recommendations with the court, mailing a copy
19 to all parties, and providing ten days for written
20 objections. However, these requirements apply only to
21 delegations to a magistrate judge pursuant to § 636(b)(1).
22 There are no similar requirements set forth under
23 § 636(b)(3), and there is no basis for judicially engrafting
24 such requirements onto that subsection. See Minetti v. Port
7
1 of Seattle, 152 F.3d 1113, 1114 (9th Cir. 1998) (per curiam)
2 (holding that § 636(b)(3) “does not require the magistrate
3 judge to submit proposed findings and recommendations” and
4 “does not provide a party with ten days to file written
5 objections with the district court”).
6 III
7 Klein argues that his Sixth Amendment right to counsel
8 was violated when the district court refused to allow him to
9 substitute retained counsel.
10 “While a defendant has a right to counsel of his choice
11 under the Sixth Amendment, it is not an absolute right.
12 Absent a conflict of interest, a defendant in a criminal
13 case does not have the unfettered right to retain new
14 counsel . . . .” United States v. Paone, 782 F.2d 386, 392
15 (2d Cir. 1986) (citations omitted). “In determining whether
16 to allow a defendant to retain new counsel, the court must
17 consider . . . the risks and problems associated with the
18 delay, and whether substitutions would disrupt the
19 proceedings and the administration of justice.” Id.; see
20 United States v. Llanes, 374 F.2d 712, 717 (2d Cir. 1967)
21 ("Judges must be vigilant that requests for appointment of a
22 new attorney . . . should not become a vehicle for achieving
23 delay.").
24 In May 2006--six years after the indictment in this
8
1 case and four years after the guilty pleas--Klein sought to
2 replace his sixth attorney with a seventh. The district
3 court properly weighed the delay and inefficiency that might
4 ensue and disallowed formal substitution, while permitting
5 new counsel to participate in the proceedings. In
6 particular, the district court was concerned that without
7 the involvement of previous counsel, a new lawyer would seek
8 to extend the briefing schedule and would repeat arguments
9 previously heard and rejected. We affirm that the district
10 court’s ruling was well within its discretion. See United
11 States v. Simeonov, 252 F.3d 238, 241 (2d Cir. 2001)
12 (reviewing denial of request to substitute for abuse of
13 discretion).
14 Klein contends on appeal that the district court erred
15 by referencing a four-factor test from United States v. John
16 Doe No. 1, 272 F.3d 116, 122-23 (2d Cir. 2001), which he
17 argues applies only to substitutions of appointed counsel,
18 no personally retained counsel. From our reading of the
19 transcript, however, it is clear that the district court
20 looked to the John Doe No. 1 factors only after determining
21 that allowing the substitution would cause substantial delay
22 and inefficiency. Thus, only as a secondary inquiry did the
23 district court assess whether the conflict between Klein and
24 his then-current counsel “was so great that it resulted in a
9
1 total lack of communication preventing an adequate defense,”
2 id. at 122 (internal quotation marks omitted), to ensure
3 that any conflict was not interfering with effective
4 representation. Although delay is generally a valid reason
5 to deny a motion to substitute counsel, it is not
6 necessarily valid where counsel is shown to be providing
7 constitutionally ineffective representation. Cf. Daniels v.
8 Woodford, 428 F.3d 1181, 1200 (9th Cir. 2005) (“Even if the
9 trial court becomes aware of a conflict on the eve of trial,
10 a motion to substitute counsel is timely if the conflict is
11 serious enough to justify the delay.”).
12 We also conclude that United States v. Gonzalez-Lopez,
13 548 U.S. 140 (2006), does not require a different result.
14 In that case, the government conceded that the district
15 court erred in refusing to allow the defendant to substitute
16 counsel, and in barring the proposed new counsel from any
17 contact with the defendant. At issue was only whether the
18 ruling violated the defendant’s Sixth Amendment right to
19 counsel in the absence of a finding of ineffectiveness, or
20 prejudice to the defendant. The Court held that “[w]here
21 the right to be assisted by counsel of one’s choice is
22 wrongly denied, . . . it is unnecessary to conduct an
23 ineffectiveness or prejudice inquiry to establish a Sixth
24 Amendment violation.” Id. at 148.
10
1 At the same time, the Supreme Court cautioned that the
2 right to counsel of choice is not absolute, and is limited
3 by “the authority of trial courts to establish criteria for
4 admitting lawyers to argue before them.” Id. at 151. The
5 Court “recognized a trial court’s wide latitude in balancing
6 the right to counsel of choice against the needs of
7 fairness, and against the demands of its calender,” id. at
8 152, and upheld a trial court’s “power to enforce rules or
9 adhere to practices that determine which attorneys may
10 appear before it, or to make scheduling and other decisions
11 that effectively exclude a defendant’s first choice of
12 counsel,” id.. The district court here did not exceed the
13 latitude afforded it under Gonzalez-Lopez when the court
14 struck the balance in favor of retaining Klein’s sixth
15 lawyer while permitting the seventh to participate.
16
17 For the foregoing reasons, the order of the district
18 court is affirmed. The mandate shall issue forthwith.
11