Challenging the Federal Sentencing Guidelines on Policy Grounds

Against this background, statistics and academic literature can be used to challenge the Guidelines. For example, research reflects that a perceived risk of imprisonment is a greater deterrent than the potential length of the sentence. See, e.g., David Weisburd et al., Specific Deterrence in a Sample of Offenders Convicted of White-Collar Crimes, 33 Criminology 587, 599 (1995). Additionally, some expert testimony about crime control and recidivism rates undercuts specific policy judgments underlying the Guidelines. See, e.g., Elizabeth Szockyj, Imprisoning White Collar Offenders?, 23 S. Ill. U. L.J. 485, 492 (1998).

Longstanding judicial practice in sentencing embodies a policy judgment that differs from the Sentencing Commission's. Pre-Guidelines sentencing reflected a policy against jail time for most white-collar defendants. See Breyer, 17 Hofstra L. Rev. at 20. The Guidelines, however, mandate sentences that are 'vastly higher than what had been the practice,' as Justice Scalia noted during the oral argument of Gall v. United States, No. 06-7949 (Oct. 2, 2007). Attorneys should argue for a return to the earlier policy. Likewise, the post-Guidelines sentencing practices of many courts provide a basis for urging a different policy choice than the Guidelines.

State sentencing guideline systems and practices reflect policy judgments as well. About 90% of white-collar cases are state cases. See Sourcebook of Criminal Justice Statistics Online, Tables 5.25.2004 and 5.44.2004, available at http://www.albany.edu/sourcebook. In 2004, 11,426 out of 108,896 fraud, forgery and embezzlement cases were federal. This alone undercuts any 'uniformity' argument for higher sentences. Cases where states are more lenient than the Guidelines for certain offenses can be a resource. For example, under the Massachusetts sentencing guidelines, a defendant convicted of a $120,000 fraud, with no prior record, could be sentenced up to a year in prison; the same defendant, under the federal Guidelines, would serve a minimum of 21 months and up to 151 months, if common enhancements apply. See Massachusetts Sentencing Grid at http://www.mass.gov/courts/formsandguidelines/sentencing/grid.html.

Now that the Guidelines are no longer mandatory, amendments by the Commission intended to curb judicial leniency are open to questioning. For example, the original Guidelines provided that single acts of 'aberrant' behavior may justify probation. U.S.S.G. Ch. 1, Pt. 4(d) (1987). By 1998, four circuits were using a 'totality of the circumstances' test to determine whether aberrant behavior justified a downward departure. See Zecevic v. United States Parole Comm'n, 163 F.3d 731, 734-35 (2d Cir. 1998) (joining the First, Ninth, and Tenth Circuits). But in a 2004 amendment, the Commission rejected this approach and prohibited downward departure where the crime is of more than a 'limited duration,' involves 'significant planning,' or involves repetitious planned behavior. See U.S.S.G. ' 5K2.20(b) (2007). This policy judgment is now open to attack, and many courts are likely to find the reasoning behind the totality test once adopted by four federal circuits to be persuasive.

What Policies to Challenge?

White-collar sentencing was one of the rare instances in which the Commission abandoned its policy of creating a system that reflected existing practice. Instead, the Commission increased business crime penalties pursuant to a policy of emphasizing proportionality and deterrence over all other factors. This may not withstand scrutiny post-Rita.

Deterrence should not trump all other factors. Cost was relevant to the original Guidelines, which recognized that 'prison capacity is a scarce resource and that the sentences have been designated to economize on that resource.' See Breyer, 17 Hofstra L. Rev. at 47. The government should be forced to defend its recommendation for lengthy white-collar sentences under the Guidelines in light of that goal. And any proposed justification should be held up to an economic analysis of penalizing criminal behavior, a theory that limits the sentence length based on a cost-benefit approach. See Richard A. Posner, An Economic Analysis of Law 219-27 (7th ed. 2007); John Collins Coffee, Jr., Corporate Crime and Punishment: A Non-Chicago View of the Economics of Criminal Sanctions, 17 Am. Crim. L. Rev. 419, 421 (1980).

Similarly, the original goal of the Guidelines was 'a short but definite period of confinement' for white-collar defendants as a deterrent. See Breyer, 17 Hofstra L. Rev. at 22 (emphasis added). Lengthy sentences calculated under the current Guidelines should be attacked as contrary to the wiser, earlier view that short sentences are adequate. There is considerable evidence that short sentences sufficiently deter prospective white-collar offenders, who typically have lawful alternatives and are profit-oriented, risk averse, not committed to a criminal lifestyle, and are sensitive to status and censure. See Adelson, 441 F. Supp. 2d at 514; Richard S. Frase, Punishment Purposes, 58 Stan. L. Rev. 67, 80 (2005); 23 S. Ill. U. L.J. at 492.

Additionally, the interaction of various Guidelines provisions, their cumulative effect, and the growing number of enhancements are bases for arguing that the resulting Guidelines sentences are bad policy. See R. Barry Ruback & Jonathan Wroblewski, The Federal Sentencing Guidelines: Psychological and Policy Reasons for Simplification, 7 Psychol. Pub. Pol'y & L. 739, 752-53 (2001). In Adelson, Judge Rakoff assailed the Guidelines' 'fetish with abstract arithmetic' as an 'utter travesty of justice.' 441 F. Supp. 2d at 512. Even Justice Breyer, a member of the original Commission and a fan of sentencing by guideline, has cautioned that 'there is no need to distinguish so finely in terms of punishment given how little is known about the effects of punishment and considering the many other arbitrary characteristics of the criminal justice system.' Breyer, 17 Hofstra L. Rev. at 13. The accelerating imposition of enhancements is contrary to the initial policy goal of replicating existing sentencing practice, the policy of short sentences, and the goal of uniformity. Indeed, when it comes to enhancements, simple addition is bad sentencing policy.

Likewise, the loss table is ripe for attack. 'One of the primary limitations of the guidelines, particularly in white collar cases, is their mechanical correlation between loss and offense level.' United States v. Ranum, 353 F. Supp. 2d 984, 990 (E.D. Wis. 2005). In many cases, the amount stolen is a 'relatively weak indicator of the moral seriousness of the offense or the need for deterrence.' United States v. Pimental, 367 F. Supp. 2d 143, 156 (D. Mass. 2005). The loss table, for example, makes no distinction between degrees of intent. Courts today may find that omission indefensible and reject the Guidelines' focus on 'loss' as the proxy for seriousness.

Finally, while most socioeconomic characteristics were banned from consideration under the Guidelines as a matter of policy, characteristics such as family life, community involvement, and work history have frequently been considered by sentencing judges. See, e.g., Ranum, 353 F. Supp. 2d at 990-91. Sound policy reasons for considering these factors, as well as support in 18 U.S.C. ' 3553(a), should be presented at sentencing.

Let Judges Be Policymakers Too

Attacking the policies behind the Guidelines must now be considered in every business crimes sentencing. A creative combination of individual circumstances, ' 3553(a) sentencing factors, and general policy arguments can lead to more favorable sentences for defendants. With the help of defense counsel, judges can articulate policy disagreements with the Guidelines in their sentencing decisions. This not only will lead to a fairer sentence for the individual defendant but also will fulfill Rita's mandate for sentencing courts to 'provide relevant information to both the court of appeals and ultimately the sentencing commission' so that the Commission 'can revise the Guidelines accordingly.' 127 S. Ct. at 2464, 2469.

Joseph F. Savage, Jr. ([email protected]), a member of this newsletter's Board of Editors, is a partner in Goodwin Procter LLP's White Collar Crime and Government Investigations Group and a former federal prosecutor. Paras N. Shah ([email protected]) is an associate at the firm.

The federal Sentencing Guidelines can lead to 'patently absurd' punishments in white-collar cases. United States v. Adelson , 441 F. Supp. 2d 506, 515 (S.D.N.Y. 2006) (Rakoff, J.). But judicial discretion in sentencing, strongly reaffirmed by the Supreme Court in Kimbrough v. United States, No. 06-6330 (Dec. 10, 2007), and Gall v. United States, No. 06-7949 (Dec. 10, 2007), has opened an important avenue for advocacy in business crime cases. Now, 'courts may vary from Guidelines ranges based solely on policy considerations, including disagreements with the Guidelines.' Kimbrough, slip op. at 13. Because, under Kimbrough, judges who depart from the Guidelines based solely on policy grounds may subject themselves to 'closer review,' white-collar attorneys should mount general policy attacks in addition to a thorough presentation of client-specific facts based on the factors set forth in 18 U.S.C. ' 3553(a). Kimbrough noted that the Sentencing Commission ' because of its experience, expertise, and capacity to filter empirical data ' is better suited than the sentencing judge to make policy decisions. Nevertheless, in the rare instances in where the Commission has veered away from its 'characteristic institutional role' by intentionally rejecting empirical data and existing practice, policy arguments may alone merit departure. See Kimbrough at 7, 21. The Guidelines' harsh sentences for white-collar crime result from such a departure. See Stephen Breyer, The Federal Sentencing Guidelines and the Key Compromises Upon Which They Rest, 17 Hofstra L. Rev. 1, 20 (1988) ('Breyer') (noting that pre-Guidelines white-collar sentencing typically did not result in jail time).

How Do You Urge a Policy Challenge?

Remind judges that the Sentencing Commission 'has never explained the rationale underlying any of its identified specific offense characteristics, why it has elected to identify certain characteristics and not others, or the weights it has chosen to assign to each identified characteristic.' Adelson, 441 F. Supp. 2d at 510. Instead, 'penalty ranges for federal economic offenses seem almost whimsical, owing more to the political enthusiasm of the moment they were enacted' than any reasoned judgment. Frank O. Bowman, III, Coping with 'Loss': A Re-Examination of Sentencing Federal Economic Crimes Under the Guidelines, 51 Vand. L. Rev. 461, 481 (1998).

Against this background, statistics and academic literature can be used to challenge the Guidelines. For example, research reflects that a perceived risk of imprisonment is a greater deterrent than the potential length of the sentence. See, e.g., David Weisburd et al., Specific Deterrence in a Sample of Offenders Convicted of White-Collar Crimes, 33 Criminology 587, 599 (1995). Additionally, some expert testimony about crime control and recidivism rates undercuts specific policy judgments underlying the Guidelines. See, e.g., Elizabeth Szockyj, Imprisoning White Collar Offenders?, 23 S. Ill. U. L.J. 485, 492 (1998).

Longstanding judicial practice in sentencing embodies a policy judgment that differs from the Sentencing Commission's. Pre-Guidelines sentencing reflected a policy against jail time for most white-collar defendants. See Breyer, 17 Hofstra L. Rev. at 20. The Guidelines, however, mandate sentences that are 'vastly higher than what had been the practice,' as Justice Scalia noted during the oral argument of Gall v. United States, No. 06-7949 (Oct. 2, 2007). Attorneys should argue for a return to the earlier policy. Likewise, the post-Guidelines sentencing practices of many courts provide a basis for urging a different policy choice than the Guidelines.

State sentencing guideline systems and practices reflect policy judgments as well. About 90% of white-collar cases are state cases. See Sourcebook of Criminal Justice Statistics Online, Tables 5.25.2004 and 5.44.2004, available at http://www.albany.edu/sourcebook. In 2004, 11,426 out of 108,896 fraud, forgery and embezzlement cases were federal. This alone undercuts any 'uniformity' argument for higher sentences. Cases where states are more lenient than the Guidelines for certain offenses can be a resource. For example, under the Massachusetts sentencing guidelines, a defendant convicted of a $120,000 fraud, with no prior record, could be sentenced up to a year in prison; the same defendant, under the federal Guidelines, would serve a minimum of 21 months and up to 151 months, if common enhancements apply. See Massachusetts Sentencing Grid at http://www.mass.gov/courts/formsandguidelines/sentencing/grid.html.

Now that the Guidelines are no longer mandatory, amendments by the Commission intended to curb judicial leniency are open to questioning. For example, the original Guidelines provided that single acts of 'aberrant' behavior may justify probation. U.S.S.G. Ch. 1, Pt. 4(d) (1987). By 1998, four circuits were using a 'totality of the circumstances' test to determine whether aberrant behavior justified a downward departure. See Zecevic v. United States Parole Comm'n , 163 F.3d 731, 734-35 (2d Cir. 1998) (joining the First, Ninth, and Tenth Circuits). But in a 2004 amendment, the Commission rejected this approach and prohibited downward departure where the crime is of more than a 'limited duration,' involves 'significant planning,' or involves repetitious planned behavior. See U.S.S.G. ' 5K2.20(b) (2007). This policy judgment is now open to attack, and many courts are likely to find the reasoning behind the totality test once adopted by four federal circuits to be persuasive.

What Policies to Challenge?

White-collar sentencing was one of the rare instances in which the Commission abandoned its policy of creating a system that reflected existing practice. Instead, the Commission increased business crime penalties pursuant to a policy of emphasizing proportionality and deterrence over all other factors. This may not withstand scrutiny post-Rita.

Deterrence should not trump all other factors. Cost was relevant to the original Guidelines, which recognized that 'prison capacity is a scarce resource and that the sentences have been designated to economize on that resource.' See Breyer, 17 Hofstra L. Rev. at 47. The government should be forced to defend its recommendation for lengthy white-collar sentences under the Guidelines in light of that goal. And any proposed justification should be held up to an economic analysis of penalizing criminal behavior, a theory that limits the sentence length based on a cost-benefit approach. See Richard A. Posner, An Economic Analysis of Law 219-27 (7th ed. 2007); John Collins Coffee, Jr., Corporate Crime and Punishment: A Non-Chicago View of the Economics of Criminal Sanctions, 17 Am. Crim. L. Rev. 419, 421 (1980).

Similarly, the original goal of the Guidelines was 'a short but definite period of confinement' for white-collar defendants as a deterrent. See Breyer, 17 Hofstra L. Rev. at 22 (emphasis added). Lengthy sentences calculated under the current Guidelines should be attacked as contrary to the wiser, earlier view that short sentences are adequate. There is considerable evidence that short sentences sufficiently deter prospective white-collar offenders, who typically have lawful alternatives and are profit-oriented, risk averse, not committed to a criminal lifestyle, and are sensitive to status and censure. See Adelson, 441 F. Supp. 2d at 514; Richard S. Frase, Punishment Purposes, 58 Stan. L. Rev. 67, 80 (2005); 23 S. Ill. U. L.J. at 492.

Additionally, the interaction of various Guidelines provisions, their cumulative effect, and the growing number of enhancements are bases for arguing that the resulting Guidelines sentences are bad policy. See R. Barry Ruback & Jonathan Wroblewski, The Federal Sentencing Guidelines: Psychological and Policy Reasons for Simplification, 7 Psychol. Pub. Pol'y & L. 739, 752-53 (2001). In Adelson, Judge Rakoff assailed the Guidelines' 'fetish with abstract arithmetic' as an 'utter travesty of justice.' 441 F. Supp. 2d at 512. Even Justice Breyer, a member of the original Commission and a fan of sentencing by guideline, has cautioned that 'there is no need to distinguish so finely in terms of punishment given how little is known about the effects of punishment and considering the many other arbitrary characteristics of the criminal justice system.' Breyer, 17 Hofstra L. Rev. at 13. The accelerating imposition of enhancements is contrary to the initial policy goal of replicating existing sentencing practice, the policy of short sentences, and the goal of uniformity. Indeed, when it comes to enhancements, simple addition is bad sentencing policy.

Likewise, the loss table is ripe for attack. 'One of the primary limitations of the guidelines, particularly in white collar cases, is their mechanical correlation between loss and offense level.' United States v. Ranum , 353 F. Supp. 2d 984, 990 (E.D. Wis. 2005). In many cases, the amount stolen is a 'relatively weak indicator of the moral seriousness of the offense or the need for deterrence.' United States v. Pimental , 367 F. Supp. 2d 143, 156 (D. Mass. 2005). The loss table, for example, makes no distinction between degrees of intent. Courts today may find that omission indefensible and reject the Guidelines' focus on 'loss' as the proxy for seriousness.

Finally, while most socioeconomic characteristics were banned from consideration under the Guidelines as a matter of policy, characteristics such as family life, community involvement, and work history have frequently been considered by sentencing judges. See, e.g., Ranum, 353 F. Supp. 2d at 990-91. Sound policy reasons for considering these factors, as well as support in 18 U.S.C. ' 3553(a), should be presented at sentencing.

Let Judges Be Policymakers Too

Attacking the policies behind the Guidelines must now be considered in every business crimes sentencing. A creative combination of individual circumstances, ' 3553(a) sentencing factors, and general policy arguments can lead to more favorable sentences for defendants. With the help of defense counsel, judges can articulate policy disagreements with the Guidelines in their sentencing decisions. This not only will lead to a fairer sentence for the individual defendant but also will fulfill Rita's mandate for sentencing courts to 'provide relevant information to both the court of appeals and ultimately the sentencing commission' so that the Commission 'can revise the Guidelines accordingly.' 127 S. Ct. at 2464, 2469.

Joseph F. Savage, Jr. ([email protected]), a member of this newsletter's Board of Editors, is a partner in Goodwin Procter LLP's White Collar Crime and Government Investigations Group and a former federal prosecutor. Paras N. Shah ([email protected]) is an associate at the firm.