United States v. Paladino, Robert D.

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
ROBERT D. PALADINO, et al.,
Defendants-Appellants.
____________
Appeals from the United States District Court for
the Northern District of Illinois, Eastern Division.
No. 01 CR 852—William T. Hart, Judge.
____________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
RANDY VELLEFF,
Defendant-Appellant.
____________
Appeal from the United States District Court for
the Northern District of Illinois, Eastern Division.
No. 02 CR 398—Joan Humphrey Lefkow, Judge.
____________
2 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JOHN PEYTON,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Central District of Illinois.
No. 03 CR 10054—Joe Billy McDade, Judge.
____________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
DARRELL TURNER,
Defendant-Appellant.
____________
Appeal from the United States District Court for the
Northern District of Indiana, South Bend Division.
No. 3:03-CR-22—Robert L. Miller, Jr., Chief Judge.
____________
ARGUED FEBRUARY 14, 2005—DECIDED FEBRUARY 25, 2005
____________
Before POSNER, WOOD, and WILLIAMS, Circuit Judges.
POSNER, Circuit Judge. We have consolidated for decision
several criminal appeals, argued the same day, all of which
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 3
present the key issue left open by the Supreme Court’s
decision in Booker v. United States, 125 S. Ct. 738 (2005)—the
application of the plain-error doctrine to appeals from sen-
tences rendered under the federal sentencing guidelines
before the Supreme Court ruled that they are advisory
rather than mandatory. Three of the cases present nonsen-
tencing issues as well, and we begin with them.
Paladino and his codefendants were convicted by a jury
of a variety of federal crimes arising out of a scheme to
defraud investors that succeeded in fleecing $11 million
from the victims. The scheme had two stages, but only the
second, which lasted from 1995 to 1997, generates non-
sentencing issues. Defendant Iles, whose function was to
recruit the investors, to whom she promised absurd returns—
more than 100 percent per week for at least 40 weeks—made
a variety of false representations. The one most significant
to her appeal is that she and James Wardell (who died be-
fore he could be indicted) were reputable and experienced
investment advisors. In fact Iles had pleaded guilty to
federal fraud charges in 1988 and the following year had
been banned by the SEC from ever associating with mem-
bers of the securities industry, while Wardell had been
convicted in a state court of theft by fraud in 1975, and in
1972 had consented to an SEC order forbidding him to
violate federal securities laws in the offer and sale of stock
in a corporation in which he had been involved. The
government was permitted to present all these prior “bad
acts” to the jury, and also to argue that Iles knew about
Wardell’s conviction and SEC bar order, though all Wardell
had told her, when she informed him of her own SEC bar
order, was that he, too, had had problems with the SEC.
Rule 404(b) of the Federal Rules of Evidence forbids the
use of evidence of a defendant’s history of illegal or un-
ethical acts to prove that he is a person of bad character and
4 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
likely therefore to have committed the crime of which he is
accused in the present case, or perhaps some other, unde-
tected crime for which he should be punished. The govern-
ment argues that it presented the evidence of Iles’s and
Wardell’s bad acts for the innocent reason that those acts
were so “inextricably intertwined” with the conduct of
which the defendants were accused in this case that the jury
needed to know the bad acts in order to form a complete
picture of that conduct. United States v. Spaeni, 60 F.3d 313,
316 (7th Cir. 1995); United States v. Ramirez, 45 F.3d 1096,
1102-03 (7th Cir. 1995). Such evidence can be proper to
enable the jurors to make sense of the evidence pertaining
to the criminal activity of which the defendant is currently
accused, United States v. Gibson, 170 F.3d 673, 682 (7th Cir.
1999), and to avoid puzzling them by making them think
that facts important to their understanding of the case are
being concealed. But those were not problems here. If the
jurors never heard anything about Iles’s and Wardell’s
previous legal troubles, it would not have occurred to them
that they were missing anything or have made any of the
other evidence in the case unintelligible.
The government’s fallback position is stronger—that Iles’s
failure to disclose Wardell’s and her histories was a part of
the scheme. But the government overreaches by arguing
that anyone who solicits an investment is required, on pain
of criminal liability for failing to do so, to disclose any
previous conviction for fraud, or for that matter anything
else that might give an investor cold feet. If asked by the
investor about such things, the solicitor would have to give
a truthful answer or be guilty of fraud. E.g., United States v.
Tadros, 310 F.3d 999, 1006 (7th Cir. 2002); United States v.
Ross, 77 F.3d 1525, 1543 (7th Cir. 1996); United States v.
Kinney, 211 F.3d 13, 17-19 (2d Cir. 2000). But to fail to
volunteer such information would be fraud only if potential
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 5
investors would assume that someone soliciting an invest-
ment would disclose such a history. We doubt that that
would be a reasonable assumption, and in any event the
government has made no effort to argue that it would be or
to provide cases that support its expansive notion of fraud.
It is true that a fiduciary (which Iles was, as we’ll see
when we come to the sentencing issues) is required to dis-
close facts material to his principal, e.g., Carr v. CIGNA
Securities, Inc., 95 F.3d 544, 547-48 (7th Cir. 1996); United
States v. Szur, 289 F.3d 200, 211-12 (2d Cir. 2002), and true
too that materiality implies merely that disclosure would
make a difference to the principal’s decision, Basic Inc. v.
Levinson, 485 U.S. 224, 231-32 (1988); TSC Industries, Inc. v.
Northway, Inc., 426 U.S. 438, 449 (1976); Castellano v. Young
& Rubicam, Inc., 257 F.3d 171, 180 (2d Cir. 2001), and that
most principals if they learned that their fiduciary had been
convicted of fraud would tell him to take a walk. But
pushed to its logical extreme, this reasoning would have
required Iles to preface every conversation with a customer
with a detailed recitation of everything in her personal
history that might alarm or discourage him, on pain of
criminal punishment if she intentionally left something out.
It would also make a person who had ever been convicted
of fraud a leper in the investment business, even if she had
not been barred from the industry.
We need not pursue this issue; for what is incontestable is
that Iles’s history is evidence that the representations she
made to potential investors really were misleading. She had
represented to them that she was both reputable and
experienced, and by doing so had implied that she had a
clean record, and certainly that she had not been barred
from the securities business for life almost a decade earlier,
after being convicted of criminal fraud. What made the
representation misleading was precisely her history; that
6 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
history was therefore direct evidence of guilt rather than
evidence merely of bad character. United States v. Polichemi,
219 F.3d 698, 709-10 (7th Cir. 2000).
The judge should not, however, have permitted the
evidence of Wardell’s legal troubles to come in without
evidence that Iles actually knew about them. All Wardell
told her was that he had had problems with the SEC. Many
members of the securities business have had problems with
the SEC that did not result in their being barred from the
business. The SEC does not bring remedial proceedings
against everyone whom it investigates and it does not pre-
vail in all the proceedings that it does bring. Anyone who
had to defend himself against the agency would acknowl-
edge having had problems with it even if he had been
exonerated. The judge’s error, however, was harmless,
because the evidence against Iles, especially in light of our
conclusion that her own previous fraud judgments were
properly placed before the jury, was compelling.
Defendant Paladino complains that he was forced to take
the stand by an erroneous evidentiary ruling. He had been
deposed years earlier in an SEC proceeding, and in the
criminal trial the judge allowed the government to present
a severely cropped version of the deposition in an effort to
demonstrate his guilty knowledge. Some of the deletions
were required in order to protect the rights of the other
defendants, see Bruton v. United States, 391 U.S. 123 (1968),
but not all. An issue of great importance to Paladino’s guilt
or innocence was whether he knew that money in a certain
account was money of investors (“invested money” or “in-
vestment money”)—which as soon as it was received was
checked out to him and the other defendants without ever
being invested—or proceeds of legitimate transactions
(“trade money”). Asked at the deposition about his knowl-
edge of the invested money, he said: “I learned that this
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 7
money that’s been coming in was investment money, and I
was totally surprised because I assumed this whole time
that this was trade money.” The government put a period
after “investment money” and deleted the rest of Paladino’s
answer. The difference between “I learned” and “I was sur-
prised to learn” is subtle but potentially important; if
Paladino wasn’t surprised to learn that investor money was
being misapplied, this would suggest that he had previous
knowledge of the fraud, which he denied.
There were other harmful deletions. For example, handed
during his deposition a “secured investor program agree-
ment,” Paladino said it “looks familiar” but added that he
hadn’t seen it until after the scheme had ended and the SEC
had filed suit. The judge allowed the government to delete
the addition even though, since Paladino’s guilt depended
on what he knew when, the date on which he first saw the
document was crucial.
In permitting the government to make this and other
misleading deletions, the trial judge violated Fed. R. Evid.
106, which provides, so far as bears on this case, that when
one party introduces in evidence a part of a writing, his
opponent “may require the introduction . . . of any other
part . . . which ought in fairness to be considered contempo-
raneously with it.” See United States v. Glover, 101 F.3d 1183,
1189 (7th Cir. 1996); United States v. Walker, 652 F.2d 708 (7th
Cir. 1981); United States v. Burns, 162 F.3d 840, 852-53 (5th
Cir. 1998); United States v. Sutton, 801 F.2d 1346, 1368-70
(D.C. Cir. 1986). But the judge’s error cannot help Paladino.
He took the stand and could if he had wanted read to the
jury the parts of the deposition that the government had
suppressed. Cf. United States v. Haddad, 10 F.3d 1252, 1259
(7th Cir. 1993); United States v. Sweiss, 814 F.2d 1208, 1212
(7th Cir. 1987). He did not do this; instead he simply
testified to his understanding of the documents about which
the government had questioned him.
8 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
That was a tactical error. His testimony would have been
more effective—in part because it would have demonstrated
the government’s mendacity—had he exposed the govern-
ment’s misleading editing. But as he had an opportunity to
correct the record, he is left to argue only that he would not
have taken the stand had he not been compelled by the trial
judge’s erroneous ruling (and erroneous it was) to rectify
the government’s misleading editing; he concludes that the
ruling infringed his Fifth Amendment right not to be
compelled to testify in his own defense. But the Supreme
Court has held that there is no compulsion in such a case,
since the defendant has the option of refusing to testify and
instead, if he is convicted, of obtaining appellate correction
of the erroneous evidentiary ruling and with it a new trial.
Luce v. United States, 469 U.S. 38, 41-43 (1984); see also Ohler
v. United States, 529 U.S. 753, 758-59 (2000); United States v.
Saunders, 359 F.3d 874, 877-78 (7th Cir. 2004); United States v.
Wilson, 307 F.3d 596 (7th Cir. 2002); United States v. Burrell,
963 F.2d 976, 991-92 (7th Cir. 1992); United States v. Doyle,
771 F.2d 250, 254-55 (7th Cir. 1985); United States v. Bond, 87
F.3d 695, 700-01 (5th Cir. 1996). The specific evidentiary
error in Luce was improper impeachment with a prior
conviction, but the principle is the same: “to raise and
preserve for review the claim of improper impeachment
with a prior conviction, a defendant must testify,” 469 U.S. at
43; for “claim of improper impeachment with a prior
conviction” read “claim of violation of Rule 106.”
This rule puts the defendant to a hard tactical choice. But
the alternative would be to give him two bites at the apple:
testify, and try to win an acquittal; if that fails, appeal and
get a new trial on the basis of the judge’s ruling. Freytag v.
Commissioner, 501 U.S. 868, 895 (1991). The Supreme Court
prefers the first of these unsatisfactory resolutions to the
second, and we are bound.
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 9
The only other nonsentencing issues in the appeal by
Paladino and his confederates have no possible merit. They
are Paladino’s complaint about a variance between indict-
ment and proof; his due process claim, which is based on an
instruction; and Law’s complaint about the judge’s refusal
to sever his trial from that of his codefendants. We move on,
therefore, to Peyton’s appeal. He was convicted by a jury of
being a felon in possession of a firearm, namely a revolver
found under the driver’s seat of his car. A police officer,
testifying as an expert witness on fingerprint evidence, said
he’d been unable to find any fingerprints on the gun that
could be used to identify who might have touched it. In
answer to a question by the prosecutor, he testified that it
was common to be unable to find usable fingerprints “at a
crime scene or on an object.” After the completion of the
direct and cross-examination of the officer, the judge asked
him how many times he’d tried to find fingerprints on
handguns, and the officer replied, “Over a hundred,”
whereupon the judge remarked: “Okay. Contrary to what
we might see on TV, is it likely or not likely to find latent
prints on handguns”—to which the officer answered that it
was unlikely.
What this line of inquiry had to do with Peyton’s guilt is
obscure. That there was no fingerprint evidence meant sim-
ply that there was no fingerprint evidence. Had Peyton’s
fingerprints been found on the gun, this would have helped
the government and if someone else’s fingerprints had been
found on the gun, this would have helped Peyton because
he testified that others had access to his car. Since no
fingerprints were found, neither side was helped; and we
can’t see what difference it makes whether failure to find
fingerprints on a gun is common or uncommon. In fact it is
extremely common: “successful development of latent
prints on firearms is difficult to achieve. In reality, very few
identifiable latent prints are found on firearms, a fact that
10 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
has been discussed in both literature and the judicial sys-
tem.” Clive A. Barnum & Darrell R. Klasey, “Factors
Affecting the Recovery of Latent Prints on Firearms,”
Prosecutor, Jan./Feb. 1998, p. 32.
The issue, rather, is whether by seeking to clarify, and in
fact reinforcing, the testimony of a government witness, the
district judge signaled to the jury that he thought the
defendant was guilty. Such signaling is improper. United
States v. Martin, 189 F.3d 547, 553 (7th Cir. 1999); Collins v.
Kibort, 143 F.3d 331, 336 (7th Cir. 1998); United States v.
Davis, 285 F.3d 378, 381-82 (5th Cir. 2002); United States v.
Tilghman, 134 F.3d 414, 416 (D.C. Cir. 1998). But since the
question how often fingerprints are found on guns was of
no actual relevance to Peyton’s guilt, it is hard to believe
that the jury was swayed, gratuitous though the judge’s
intervention was. In any event, the evidence of Peyton’s
guilt was conclusive, so the judge’s error was harmless.
Peyton admitted to the police that he had known the gun
was in his car, and since he was driving the car he was in
possession of the gun. The fact that, if he was believed, he
had not placed the gun there was irrelevant. If someone
hands you a gun and you put it in your pocket, you possess
it; and it is the same here. See United States v. Lane, 267 F.3d
715, 718-19 (7th Cir. 2001); United States v. Wetwattana, 94
F.3d 280, 283-84 (7th Cir. 1996); United States v. Garrett, 903
F.2d 1105, 1110-11 (7th Cir. 1990); United States v. Teemer, 394
F.3d 59, 64 (1st Cir. 2005).
Turner was charged with possessing a revolver on
January 30, 2003, in furtherance of a drug crime, and also
with possessing a shotgun on the same day in furtherance
of another drug crime. He received separate, consecutive
sentences for the two crimes under 18 U.S.C. § 924(c), which
punishes using or carrying a firearm “during and in relation
to” a “crime of violence or drug trafficking crime.” United
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 11
States v. Cappas, 29 F.3d 1187, 1190-91 (7th Cir. 1994), holds
that the offense defined by that statute is actually the use of
one or more guns during or in relation to a drug offense, so
had Turner used two guns during one offense he would
have been guilty of only one violation of section 924(c). See
also United States v. White, 222 F.3d 363, 373-74 (7th Cir.
2000); United States v. Taylor, 13 F.3d 986, 992-94 (6th Cir.
1994); United States v. Lindsay, 985 F.2d 666, 674 (2d Cir.
1993); United States v. Smith, 924 F.2d 889, 894-95 (9th Cir.
1991). But he was charged with two separate drug crimes,
albeit committed on the same day, each involving a gun
(different guns, though that is of no significance). In the
morning, armed with a revolver, he sold crack to one
person. In the afternoon, armed with a shotgun, he sold
crack to another person. These were unquestionably se-
parate drug offenses, and therefore his carrying of a gun
during each of them constituted two violations of section
924(c). Compare United States v. Cappas, supra, 29 F.3d at
1190; United States v. Johnson, 977 F.2d 1360, 1376-77 (10th
Cir. 1992); United States v. Privette, 947 F.2d 1259, 1262-63
(5th Cir. 1991). He complains that the instructions did not
clearly require the jury to tie each gun to a different drug
transaction. They indeed were unclear, but the evidence was
unequivocal and so any error in the instructions was
harmless.
Velleff raises only sentencing issues; and so it is to the
sentencing issues presented by these consolidated appeals
that we now turn. We begin with Paladino and his co-
defendants. He was sentenced to 72 months in prison and
also ordered to pay restitution of $11-plus million, as were
his codefendants. Iles was sentenced to 78 months, Law to
84, and Benson and Peitz to 188. The government concedes
that all these sentences violated the Sixth Amendment right
to trial by jury in federal criminal cases, as interpreted in
12 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
Booker, because in all of them the judge had enhanced the
sentences (for such aggravating circumstances as being an
organizer of the fraudulent conspiracy or a supervisor of
others involved in it, or abusing a position of trust) on the
basis of facts not determined by the jury. The government
contends, and we agree, that under the guidelines regime
overthrown by Booker the sentences would have been law-
ful.
There are only two serious challenges to the enhance-
ments. One is by Peitz, who claims that his trial lawyer gave
him ineffective assistance by failing to argue that he should
not be responsible for acts committed by his coconspirators
within the scope of the conspiracy after he was expelled
from it. The claim is premature, because there is no affidavit
or other evidence from the lawyer indicating why he did not
make the argument. He may well have had good tactical
reasons. Without meaning to prejudice Peitz’s claim should
he choose to make it the basis of a motion under 28 U.S.C.
§ 2255, we remind him that a defendant who sets in motion
a train of events foreseeably inflicting losses that in fact
materialize cannot escape responsibility by quitting, let
alone by being expelled from, the conspiracy. United States
v. Patel, 879 F.2d 292, 294 (7th Cir. 1989); United States v.
Schweihs, 971 F.2d 1302, 1323-24 (7th Cir. 1992); United States
v. Melvin, 91 F.3d 1218, 1226-27 (9th Cir. 1996).
The issue is not whether reporting the conspiracy to the
authorities is the only way of withdrawing from a conspir-
acy; it is merely one way. United States v. Pandiello, 184 F.3d
682, 687 (7th Cir. 1999); United States v. Patel, supra; United
States v. Borelli, 336 F.2d 376, 388 (2d Cir. 1964) (Friendly, J.).
The issue is the form of withdrawal that will limit a conspir-
ator’s liability for losses that his own activity made more
probable. As we explained in the Patel case, “having set in
motion a criminal scheme, a conspirator will not be permit-
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 13
ted by the law to limit his responsibility for its consequences
by ceasing, however definitively, to participate. Such
cessation may or may not be effective withdrawal in a lay
sense, but this is one of those places where the law uses a
word in a special sense. You do not absolve yourself of guilt
of bombing by walking away from the ticking bomb. And
similarly the law will not let you wash your hands of a
dangerous scheme that you have set in motion and that can
continue to operate and cause great harm without your
continued participation.” 879 F.2d at 294. By communicating
his withdrawal to the other members of the conspiracy, a
conspirator might so weaken the conspiracy, or so frighten
his conspirators with the prospect that he might go to the
authorities in an effort to reduce his own liability, as to
undermine the conspiracy. Peitz neither informed on the
conspiracy so that the government could apprehend the
other conspirators and by doing so prevent it from inflicting
the losses for which his own conduct had set the stage, nor
took any other measure to weaken the conspiracy; and so he
remained liable for foreseeable losses inflicted by the
conspiracy after his expulsion.
The other challenge to an enhancement is by Iles, who
contests the finding that she abused a position of trust. The
finding is based on evidence that she invited potential
investors to entrust her with their money, assuring them
that it would be safe in her hands. By establishing a fidu-
ciary relationship with them she acquired a position of trust
that she abused, as in United States v. Frykholm, 267 F.3d 604,
612-13 (7th Cir. 2001).
Peyton was sentenced to 180 months in prison, the stat-
utory minimum because of his recidivist status as deter-
mined by the trial judge. His only challenge to the sentence
is that the facts underlying the determination of that status
were found by the judge rather than by the jury, and the
14 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
challenge fails under Harris v. United States, 536 U.S. 545(2002); cf. Almendarez-Torres v. United States, 523 U.S. 224(1998). The government cross-appealed, complaining about
the judge’s departing downward from the guidelines range
of 235 to 293 months to the statutory minimum, but it later
moved to withdraw the appeal and we granted the motion.
The district judge had departed downward on two grounds:
that Peyton had provided impressive evidence of rehabilita-
tion, during the year in which he was free on bail prior to
his sentencing, by abstaining from alcohol, living amicably
with his wife, holding a steady job, and counseling his
children to avoid following in his criminal footsteps; and
that his criminal history overstated his recidivist proclivities
because most of his prior crimes had been committed
during a single spree. The government argued in its cross-
appeal that the facts did not justify such a departure from
the guidelines range, and this may be correct (we need not
decide) under the rules that prevailed when the guidelines
were mandatory. But now we know that the guidelines are
advisory, and so the question is whether, if the judge re-
sentenced Peyton to 180 months on the same ground on
which he based the original sentence, we would reverse on
the ground that the 180-month sentence was unreasonable.
Under the new sentencing regime the judge must justify
departing from the guidelines, and the justification has to be
reasonable, but we cannot think on what basis a 15-year
sentence for Peyton, who was 34 years old when sentenced,
could be thought unreasonably short. The issue is academic,
since the cross-appeal has been dismissed. But for future
reference it is worth noting that there are cases in which one
can be certain that the judge would not have given a
different sentence even if he had realized that the guidelines
were merely advisory.
Turner was sentenced to 613 months in prison. A substan-
tial portion of the sentence was based on findings by the
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 15
judge, but not the jury, regarding the quantity of crack that
he had sold and other circumstances of his crime. Velleff
was sentenced to 430 months for robbery and for drug and
gun offenses. Some of the time was due to a recidivist
enhancement not affected by Booker, which did not overrule
Almendarez-Torres, but some was based on mandatory
provisions of the sentencing guidelines.
Had the judgments become final before the Supreme
Court decided Booker, the defendants would be out of luck,
because Booker is not retroactive. McReynolds v. United States,
2005 WL 237642 (7th Cir. Feb. 2, 2005); see also Green v.
United States, 2005 WL 237204, at *1 (2d Cir. Feb. 2, 2005)
(per curiam); In re Anderson, 2005 WL 123923, at *3-4 (11th
Cir. Jan. 21, 2005). Had the defendants raised a Booker issue
in the district court, we would review the resolution of the
issue in the ordinary way. But because they failed to do so,
and acknowledge that our review is for “plain error” only,
we must decide whether the sentencing errors of which they
complain were indeed “plain.”
Since all the sentences were within the sentencing range
that Congress had created for these defendants’ conduct, the
district judge could give them identical sentences today
without violating the Sixth Amendment. The government
argues that, since the defendants cannot prove otherwise,
the judges’ error in thinking themselves bound by the
guidelines was not a plain error, and so we should affirm
the sentences.
An error is plain, first of all, if it is clearly an error, and
that criterion is satisfied in cases such as these after Booker.
But it must also affect the defendant’s “substantial rights”
and, in addition, “seriously affect[ ] the fairness, integrity,
or public reputation of judicial proceedings.” Johnson v.
United States, 520 U.S. 461, 466-67 (1997); see also United
16 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
States v. Young, 470 U.S. 1, 15-16 (1985); United States v.
Esterman, 324 F.3d 565, 569-73 (7th Cir. 2003); United States
v. Nance, 236 F.3d 820, 825-26 (7th Cir. 2000); United States v.
Brennan, 395 F.3d 59, 71 (2d Cir. 2005). This last criterion is
usually equated to causing a “miscarriage of justice,” United
States v. Frady, 456 U.S. 152, 163 n. 14 (1982); United States v.
Allen, 390 F.3d 944, 947-48 (7th Cir. 2004); United States v.
Lechuga, 994 F.2d 346, 351 (7th Cir. 1993) (en banc); United
States v. Bradley, 390 F.3d 145, 152 (1st Cir. 2004), that is (in
the context of the guilt phase of the criminal proceeding), to
creating a substantial risk of convicting an innocent person,
since such a conviction certainly challenges the fairness,
integrity, and public reputation of judicial proceedings. The
reason for the heavier burden of overturning a conviction or
sentence when the defendant failed to advance the ground
for his challenge in the district court is the prejudice to the
government from having been deprived of an opportunity
to meet the challenge, and the additional work piled on the
district court of conducting further proceedings that would
have been unnecessary had the defendant advanced his
objection to conviction or sentence in a timely fashion.
The question is how much heavier the burden of overturn-
ing is. The difference between the “substantial rights” and
“fairness, integrity, or public reputation” elements of the
plain-error standard is not entirely clear. One possibility,
suggested by United States v. Olano, 507 U.S. 725, 734-35
(1993), and the numerous cases that speak in terms of
“miscarriage of justice,” is that the first element merely
requires prejudice, in the sense that the verdict might have
been different, whereas the second requires confidence that
if the error is not corrected the result will be intolerable,
such as the conviction of an innocent person or subjecting a
guilty person to an illegally long sentence. An error can be
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 17
prejudicial without being intolerable, because it might be
apparent that a retrial or a resentencing would lead to the
same result.
Johnson v. United States, supra, 520 U.S. at 468-70, the
canonical modern statement of the plain-error standard,
suggests that “substantial rights” may mean simply impor-
tant rather than merely technical rights and that “fairness,
integrity, and public reputation” may refer simply to
prejudice, that is, the likelihood that the verdict, or sentence,
challenged on appeal was actually affected by the error. Yet
United States v. Dominguez Benitez, 124 S.Ct. 2333, 2339-41
(2004), tacks back toward the Olano approach. This differ-
ence in understandings of the plain-error standard, if more
than verbal, might be important in some cases, but is not
critical in the cases before us, for there may have been plain
error here even under the more stringent reading, which
requires proof of a miscarriage of justice in the sense that we
have indicated.
We do not have a question of guilt or innocence; the
defendants are guilty. The issue is the meaning of plain
error in the context of an illegal sentence. The government’s
basic position is that if a sentence was legal before Booker, it
cannot be plainly erroneous; because the guidelines remain
valid, albeit demoted to being merely advisory, a sentence
that complies with them would be very unlikely to be
reversed. The argument rests on a misunderstanding of the
difference between the guilt phase of a case and the punish-
ment phase. Guilt is either-or; the defendant is either guilty
or innocent. If an error is committed and the defendant is
convicted, the appellate court has only to consider whether
the defendant would probably have been acquitted had the
error not occurred. If so—if the error may well have precipi-
tated a miscarriage of justice (which the conviction of an
innocent person is)—it is a plain error and the defendant is
18 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
entitled to a new trial. But sentencing is not either-or; it is
the choice of a point within a range established by Congress,
and normally the range is a broad one. There are exceptions,
notably where the choice is between death and prison; then,
as in Jones v. United States, 527 U.S. 373, 402-05 (1999), it may
be feasible for the appellate court to determine that despite
the error the choice would have been the same. Cf. United
States v. Cotton, 535 U.S. 625, 633-34 (2002). That is not true
here; here, unless any of the judges in the cases before us
had said in sentencing a defendant pre-Booker that he would
have given the same sentence even if the guidelines were
merely advisory (which none of the judges did say), it is
impossible for a reviewing court to determine—without
consulting the sentencing judge (a pregnant qualification, as
we are about to see)—whether the judge would have done
that.
The government argues that if, as happened in several of
the cases, the judge imposed a sentence higher than the
guideline minimum, this shows that he wouldn’t have im-
posed a lighter sentence even if he had known the guide-
lines were merely advisory. United States v. Bruce, 396 F.3d
697, 720 (6th Cir. 2005). We disagree. A conscientious judge—
one who took the guidelines seriously whatever his private
views—would pick a sentence relative to the guideline
range. If he thought the defendant a more serious offender
than an offender at the bottom of the range, he would give
him a higher sentence even if he thought the entire range
too high.
Even in cases in which there is a broad sentencing range,
it may sometimes be possible for an appellate court to be
confident that the sentencing judge would have given the
sentence he did even if he had not misunderstood the legal
effect of the guidelines. It would be the mirror image of
Peyton’s case, where we expressed confidence that the judge
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 19
would not have imposed a heavier sentence had he known
the guidelines were not binding; for he gave Peyton a term
of imprisonment that was not only four and a half years
below the lowest point in the applicable guideline range but
was the lightest sentence that the applicable statute permit-
ted him to give. Similarly, if a judge were to impose a
sentence at the statutory maximum and say that if he could
he would have imposed an even longer sentence, there
would be no basis for thinking that if he had known that the
sentencing guidelines are merely advisory he would have
given the defendant a lighter sentence.
But if as in the cases before us the sentencing judge might
well have decided to impose a lighter sentence than dictated
by the guidelines had he not thought himself bound by
them, his error in having thought himself bound may have
precipitated a miscarriage of justice. It is a miscarriage of
justice to give a person an illegal sentence that increases his
punishment, just as it is to convict an innocent person.
United States v. Pawlinski, 374 F.3d 536, 540-41 (7th Cir.
2004); United States v. Newman, 965 F.2d 206, 213 (7th Cir.
1992); United States v. Syme, 276 F.3d 131, 158 (3d Cir. 2002);
United States v. Portillo-Mendoza, 273 F.3d 1224, 1228 (9th Cir.
2001); compare United States v. Moyer, 282 F.3d 1311, 1319
(10th Cir. 2002). As we said in Pawlinski, “the entry of an
illegal sentence is a serious error routinely corrected on
plain-error review.” 374 F.3d at 541. To tell a defendant we
know your sentence would have been 60 months shorter
had the district judge known the guidelines were merely
advisory, because he’s told us it would have been—but that
is your tough luck and you’ll just have to stew in prison for
60 additional months because of an acknowledged violation
of the Constitution—would undermine the fairness, the
integrity, and the public repute of the federal judicial
process. United States v. Davis, 2005 WL 334370, at *8 (3d Cir.
20 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
Feb. 11, 2005); United States v. Ameline, 2005 U.S. App. LEXIS
2032, at *18-20 (9th Cir. Feb. 9, 2005), amended, 2005
WL 350811, at *5-6 (9th Cir. Feb. 10, 2005); United States v.
Oliver, 2005 WL 233779, at *8 (6th Cir. Feb. 2, 2005); United
States v. Hughes, 396 F.3d 374, 381 (4th Cir. 2005). The
sentencing phase of a prosecution is not to be taken lightly,
as we know from Glover v. United States, 531 U.S. 198 (2001),
where the Supreme Court rejected this court’s holding in
Durrive v. United States, 4 F.3d 548, 550-51 (7th Cir. 1993),
that an error by counsel that resulted in a higher sentence
for his client did not violate the right to effective assistance
of counsel unless the higher sentence was unfair. See also
United States v. Adams, 252 F.3d 276, 282-89 (3d Cir. 2001).
The equal and opposite error is to assume that every
sentence imposed in violation of the Sixth Amendment and
therefore of Booker is plainly erroneous and thus automati-
cally entitles the defendant to be resentenced. That is the
error committed by the Sixth Circuit in United States v.
Oliver, supra, at *8, and the Fourth Circuit in United States v.
Hughes, supra, 396 F.3d at 380-81. What these courts over-
looked is that if the judge would have imposed the same
sentence even if he had thought the guidelines merely
advisory (in which event there would have been no Sixth
Amendment violation), and the sentence would be lawful
under the post-Booker regime, there is no prejudice to the
defendant.
The only practical way (and it happens also to be the
shortest, the easiest, the quickest, and the surest way) to
determine whether the kind of plain error argued in these
cases has actually occurred is to ask the district judge. We
agree, therefore, with the Second Circuit’s ruling in United
States v. Crosby, 2005 WL 240916, at *11 (2d Cir. Feb. 2, 2005),
that what an appellate court should do in Booker cases in
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 21
which it is difficult for the court to determine whether the
error was prejudicial is, while retaining jurisdiction of the
appeal, order a limited remand to permit the sentencing
judge to determine whether he would (if required to
resentence) reimpose his original sentence. See also United
States v. Williams, 2005 WL 425212 (2d Cir. Feb. 23, 2005). If
so, we will affirm the original sentence against a plain-error
challenge provided that the sentence is reasonable, the
standard of appellate review prescribed by Booker. 125 S. Ct.
at 765. The proviso is important; the mere reimposition of
the original sentence does not insulate it from appellate
review under the new standard.
If, on the other hand, the judge states on limited remand
that he would have imposed a different sentence had he
known the guidelines were merely advisory, we will vacate
the original sentence and remand for resentencing. In formu-
lating the statement (whether the judge’s conclusion is that
he would, or would not, adhere to the original sentence),
“the District Court should obtain the views of counsel, at
least in writing, but ‘need not’ require the presence of the
Defendant, see Fed.R.Crim.P. 43(b)(3). Upon reaching its
decision (with or without a hearing) whether to resentence,
the District Court should either place on the record a de-
cision not to resentence, with an appropriate explanation,”
United States v. Crosby, supra, at *13, or inform this court of
its desire to resentence the defendant. (By “should” in the
quoted passage we understand “must.”) We will then
vacate the sentence and, “with the Defendant present, [the
district court shall] resentence [the defendant] in conformity
with the SRA [and] Booker/Fanfan, . . . including an appropri-
ate explanation, see § 3553(c).” Id.
Our procedure is not identical to that set forth in Crosby,
though it is very close. Crosby envisages the district judge as
vacating the original sentence if the judge wants to resentence
22 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
the defendant. Under our procedure, since we retain
jurisdiction throughout the limited remand, we shall vacate
the sentence upon being notified by the judge that he would
not have imposed it had he known that the guidelines were
merely advisory.
The Sixth Circuit, in United States v. Milan, 2005
WL 309934 (6th Cir. Feb. 10, 2005), rejected Crosby on the
ground that the Supreme Court in Booker had remanded the
case for resentencing. But in so ruling the Sixth Circuit
overlooked the fact that the government had waived the
argument that Booker’s appeal was governed by the plain-
error standard, as we had noted in our decision in Booker,
which the Supreme Court affirmed. United States v. Booker,
375 F.3d 508, 515 (7th Cir. 2004). The Supreme Court made
no ruling, express or implied, on the proper standard of
plain-error analysis in cases such as this.
The Eleventh Circuit, while agreeing with the Second that
it is impossible for a reviewing court to know what sentence
a district judge would have given had he known the
guidelines were merely advisory, concluded that this means
that a defendant in such a case cannot show that his sub-
stantial rights have been affected; cannot, therefore, estab-
lish plain error. United States v. Rodriguez, 2005 WL 272952(11th Cir. Feb. 4, 2005). Given the alternative of simply
asking the district judge to tell us whether he would have
given a different sentence, and thus dispelling the epistemic
fog, we cannot fathom why the Eleventh Circuit wants to
condemn some unknown fraction of criminal defendants to
serve an illegal sentence. Crosby is the middle way between
placing on the defendant the impossible burden of proving
that the sentencing judge would have imposed a different
sentence had the judge not thought the guidelines manda-
tory and requiring that all defendants whose cases were
pending when Booker was decided are entitled to be
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 23
resentenced, even when it is clear that the judge would
impose the same sentence and the court of appeals would
affirm.
To summarize, we affirm all the convictions and Peyton’s
sentence, but we direct a limited remand of the remaining
sentences in accordance with the procedure set forth above,
thus retaining appellate jurisdiction.
Because this opinion establishes a new rule for the circuit,
it was circulated to the entire court before issuance. 7th Cir.
R. 40(e). All but two members of the court in regular active
service voted not to hear the case en banc. Judges Ripple
and Kanne voted to hear it en banc.
RIPPLE, Circuit Judge, dissenting from the denial of re-
hearing en banc. In the few short weeks since the Supreme
Court’s decision in United States v. Booker, 125 S. Ct. 738(2005), the courts of appeals across the Country have
produced a significant number of opinions setting forth a
broad spectrum of approaches designed to implement the
Supreme Court’s decision. The panel opinion before us sets
forth the holdings of the first generation of those various
cases and then presents a variation of one. Today’s panel
opinion thus initiates the second generation of post-Booker
opinions, variations on the themes set forth in the first
generation of opinions. No doubt, before the vernal equinox
arrives, these second generation opinions will produce a
further variation and a third generation of opinions will be
24 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
upon us. Complexity will complicate complexity. The
companies that produce the reports of our opinions will be
delighted; the notes and comments editors of the Nation’s
law reviews will have sufficient fodder for all of next year’s
crop of aspiring editors—and the federal courts will raise
serious doubts about their capacity to govern.
Is this the course that the Supreme Court expected would
follow its pronouncement in Booker? Are we to attribute to
the Court a desire that the Nation’s intermediate courts of
appeals develop elaborate and diverse approaches to Booker’s
holding? There are, no doubt, times when a Supreme Court
decision is intended to encourage intermediate appellate
courts to address unresolved issues and for the intermediate
courts’ resolutions of those issues to percolate to the Su-
preme Court. But the situation presented by Booker is hardly
one. The entire federal criminal justice system came to a
standstill in anticipation of the Court’s decision in Booker.
Now that the Court has ruled, it is time to implement its
decision—immediately and forthrightly.
As a threshold matter, then, we ought to pause and reflect
on the reason for this plethora of diverse approaches,
churned out by the courts at a pace that obviously has pre-
cluded the sort of reflection and open collegial consultation
that ought to be part and parcel of the process of deciding
an appellate case.
One possible reason for such a judicial behavior pattern
would be the novelty of the Supreme Court’s decision.
However, we are not confronted with such a once-in-a-
century situation. The situation before us is not unique: We
simply must implement a decision that holds that the
sentencing procedure employed in the federal courts is
unconstitutional because it denies the right to a jury trial.
We are asked to see that individuals illegally sentenced to
prison are relieved of the burden of serving a sentence im-
posed under such an unconstitutional system.
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 25
In my view, the approach formulated by the panel suffers
from two basic infirmities. First, as Judge Kanne convinc-
ingly points out, the abbreviated “quick look” required of a
district court is hardly a substitute for the sentencing pro-
cess that the Supreme Court now has said is mandated by
our Constitution. Until the district court undertakes a new
sentencing process—cognizant of the freedom to impose
any sentence it deems appropriate as long as the applicable
guidelines range and the 18 U.S.C. § 3553(a) factors are con-
sidered—the district court cannot accurately assess whether
and how its discretion ought to be exercised. The panel’s
holding requires the court to pre-judge and to pre-evaluate
evidence it has not heard. Sentencing after Booker will raise
subtle issues as to how much emphasis ought to be given to
particular facts and circumstances. This task can be ac-
complished competently only after hearing witnesses and
seeing the evidence. In short, what the panel substitutes for
the usual judicial reaction to an unconstitutionally-imposed
sentence is a process that simply is inadequate to the task.
In all too many instances, the process scripted by the panel
will serve as an invitation for the district court to give only
a superficial look at the earlier unconstitutionally-imposed
sentence. The constitutional right at stake hardly is vin-
dicated by a looks-all-right-to-me assessment by a busy
district court. Indeed, if we wanted to drag our collective
judicial feet and ensure that the Supreme Court’s decision
had minimal impact (a motivation I certainly do not attribute
to my colleagues), it would be difficult to come up with a
1
better device than the one crafted by the panel opinion.
In addition to mandating an enfeebled mechanism for the
correcting of the unconstitutional process identified by the
1
Cf. United States v. Williams, No. 04-2882, slip op. at 16 (2d Cir.
Feb. 23, 2005) (defending a truncated procedure partially on the
ground that it avoids administrative burdens).
26 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
Supreme Court, the panel opinion also has introduced into
our decisions a new rigidity with respect to our formulation
of the plain error doctrine—a rigidity that I fear my col-
leagues will regret long after the “Booker cases” are a faded
memory.
The Supreme Court has recognized that “[n]ormally, al-
though perhaps not in every case, the defendant must make a
specific showing of prejudice to satisfy the ‘affecting sub-
stantial rights’ prong of Rule 52(b).” United States v. Olano,
507 U.S. 725, 735 (1993) (emphasis supplied). However, we
have never required this specific showing of prejudice in
circumstances in which the error has denied the defendant
a constitutionally-mandated process and when the outcome
of that process cannot be known until the process actually
takes place. Rather, in such contexts, we have ordered
resentencing when a distinct possibility exists that the error
influenced the district court’s selection of a particular sen-
tence. For instance, we have remanded sentences that fell in
the overlap of an erroneously applied sentencing range and
the correct guidelines range, “ ‘unless we have reason to
believe that the error did not affect the district court’s
selection of a particular sentence.’ ” Emezuo v. United States,
357 F.3d 703, 711 (7th Cir. 2004) (quoting United States v.
Wallace, 32 F.3d 1171 (7th Cir. 1994)); see United States v.
Sofsky, 287 F.3d 122, 125 (2d Cir. 2002) (relaxing the other-
wise rigorous plain error review standards to correct unob-
jected error because the error related to sentencing and the
defendant lacked prior knowledge that the erroneous
sentencing condition would be imposed); United States v.
Plaza-Garcia, 914 F.2d 345, 347-48 (1st Cir. 1990) (vacating
sentence under the plain error doctrine that fell within
incorrect and correct guidelines range because the sentence
“may well have been influenced by the [erroneous] sentenc-
ing recommendation”); see also United States v. Reyna, 358
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 27
F.3d 344, 351 (5th Cir. 2004) (presuming prejudice when the
district court failed to allow defendant to allocute because
of the nature of the right and the difficulty of proving the
violation affected a specific sentence); United States v. Adams,
252 F.3d 276 (3d Cir. 2001) (same).
The panel decision today offers a superficially pragmatic,
but not a principled, basis for adopting its novel approach
to plain error analysis. Particularly troubling, in terms of its
long-term impact, is the delegation to the district court of
our judicial responsibility to evaluate plain error on an
independent basis. See United States v. Domiguez Benitez, 124
S. Ct. 2333, 2340 (2004) (“A defendant must thus satisfy the
judgment of the reviewing court . . . .”) (emphasis added).
Indeed, even when viewed as a “pragmatic” response to
Booker’s mandate, the panel’s hastily constructed procedure
falls on its own sword. The panel never tells us what it plans
to do with cases in which retirement, disability or death has
made impossible consultation with the district judge who
imposed the unconstitutional sentence. Even when such
consultation is possible, our case tracking computer pro-
grams will get quite a workout, and we certainly shall see
another New Year come and go before this situation no
longer impedes our regular work. The Supreme Court has
told us that one of the reasons for plain error review is to re-
duce the burden on the judicial system. See Johnson v. United
States, 520 U.S. 461, 468 (1997). It is indeed difficult to see
how the odyssey on which the panel now sends us will do
2
anything other than tie us in knots.
Booker requires a simple, direct remedy to those harmed
by the unconstitutional procedure of former times. We would
2
Cf. Williams, slip op. at 20 n.15 (criticizing the procedure
scripted by the panel opinion as introducing a “needless yo-yoing
between the appellate court and the district court”).
28 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
best serve justice by implementing the Supreme Court’s
mandate quickly and efficiently. I respectfully dissent.
KANNE, Circuit Judge, dissenting from the denial of
rehearing en banc. I concur with all aspects of the panel’s
opinion issued today—except for the proposed mechanism
to remedy the unconstitutionally imposed sentences. I be-
lieve that the sentences must be vacated and remanded to
the district courts for resentencing in light of Booker.
In Booker, the Supreme Court stated that enhancements
resulting from judge-found (rather than jury-found or ad-
mitted) facts violate the Sixth Amendment. 125 S. Ct. at 755-
56. Importantly, Booker’s companion petitioner, Fanfan, had
received a sentence that did not violate the Sixth Amend-
ment but was nonetheless deemed unconstitutional because
it was imposed under a mandatory Guidelines regime. Id. at
768. Any sentence handed down under a mandatory
guideline regime is unconstitutional. The solution selected
by the panel (a limited remand, simply asking the district
judge whether there was a “miscarriage of justice”) does not
fully rectify this problem.
In the post-Booker world, sentencing judges have discretion
to weigh a multitude of factors that were not ordinarily
relevant or appropriate to consider under the previous
regime. See, e.g., U.S.S.G. § 5H1 (specific offender character-
istics including age, family ties and responsibilities, and
employment record). These are the very factors that might
Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378 29
convince a judge to resentence. The panel’s limited remand
leaves open the possibility that these factors might come to
light in a hearing conducted by the district court, but there
is no guarantee that such a hearing will be held—and if we
retain jurisdiction as the panel would have it, it is unclear
that a district judge could even compel such a hearing.
Certainly, we can anticipate that some district judges will
opt not to have a hearing and simply choose not to resen-
tence, at which point we may be required to review the
standing sentence for reasonableness. But surely reasonable-
ness depends not only on the length of the sentence but on
the process by which it is imposed. The record in the case in
which there was no resentencing (or hearing on the issue)
will be impossible for us to review for reasonableness, if
reasonableness is to be determined with regard to all of the
“the numerous factors that guide sentencing.” See Booker,
125 S. Ct. at 765-66. We know now that the universe of
factors that guides sentencing is larger than it was pre-
Booker, and defendants should have the opportunity to
argue these factors in a full resentencing hearing and have
them reflected in the record. It is the only way to know
whether a different sentence would have been imposed un-
der advisory guidelines. To deny defendants this oppor-
tunity is a “miscarriage of justice” and thus is necessarily
plain error.
Therefore, the necessary approach is to vacate all the sen-
tences so that new ones are imposed in accord with Booker—
constitutionally, under an advisory Guideline system—that
would allow the judge to exercise discretion in sentencing.
This is the approach that has been adopted by the Fourth,
Sixth, and Ninth Circuits. United States v. Hughes, 396 F.3d
374 (4th Cir. 2005); United States v. Ameline, No. 02-30326,
2005 WL 350811 (9th Cir. Feb. 10, 2005); United States v.
30 Nos. 03-2296, 03-2383—86, 04-1951, 04-2339, 04-2378
Milan, 398 F.3d 445 (6th Cir. 2005). I read the panel’s ap-
proach as an ad hoc procedure through which the district
court can elect not to exercise its sentencing discretion as
Booker requires. It is hard to see how, without a hearing and
briefing tantamount to resentencing by normal vacatur and
remand procedures, a district court could ever give “an
appropriate explanation” for its decision not to resentence. If
a district judge chooses not to resentence (especially without
a hearing), that judge is effectively letting stand a sentence
imposed under an unconstitutional regime.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—3-15-05