Sunday, September 23rd, 2007

Don’t Go Western, Young Man

United States v. Cole, No. 06-0226-cr (2d Cir. August 9, 2007) (Sack, Parker, Hall, C.JJ)

This case demonstrates the first principle of sentencing thermodynamics: the farther a district court gets from Foley Square – here, the Western District – the more bizarre its rulings are likely to become.

Facts: Patrick Cole was the patron of a garden-variety Ponzi scheme that netted him nearly $1.5 million over four years. He pled guilty to mail fraud under a plea agreement that contained various stipulations about the Sentencing Guidelines, but that left him free to dispute the applicability of the “sophisticated means” enhancement. Cole gave the probation officer who was preparing the presentence report a copy of the plea agreement, and the officer sided with the government on this issue.

Cole also filed timely objections to the report with the district judge but, at sentencing, the judge would not even entertain those objections, citing “local procedural guidelines” that require, in essence, exhaustion of administrative remedies – a conference with the probation officer – before sentencing. Finding that no such meeting had taken place, Judge Arcara refused to hear Cole’s sentencing arguments.

Perhaps equally bizarrely, in the middle of the sentencing, the judge decided that Cole, who had not accounted for most of the stolen money, must have “a stash somewhere or an offshore account.” It determined that this was the basis for an upward departure, then sentenced Cole to 90 months’ imprisonment, 12 months longer than the top of the rage that he was not permitted to contest.

The Appellate Court’s Decision:

The easy part of this case was the upward departure. Cole had less than two hours notice of the district court’s intention to upwardly depart. Since this was woefully insufficient, the court remanded the case for resentencing. It dodged, at least for now, any substantive comment on the upward departure itself, even though it would seem to be pretty clear that the departure was unwarranted.

The real challenge for the Circuit was the source and meaning of the “local procedural guideline” that Judge Arcara invoked to bar Cole’s sentencing arguments. It turns out that the source was Judge Arcara’s individual rules (Judge Skretny uses them too). But what this rule actually is took some unraveling. Everyone agreed that it was not a “local rule.” The Circuit concluded that, if it is not a local rule, it must be something, so it decided that it was a “standing order,” which is regulated by Fed.R.Crim.Proc 57(b).

Under this Rule, standing orders must be “consistent with federal law.” Judge Arcara’s standing order is clearly inconsistent with Fed.R.Crim.Proc. 32(f), under which the parties may meet with the probation officer to discuss objections to the presentence report, and Rule 32(i) under which the sentencing court “must allow” to comment on sentencing matters.

The Circuit concluded that, on remand, the court “must permit Cole to argue his objection [to the presentence report] and to argue any other objections as may be appropriate.

Post-Script. While the Court “note[d], with concern” Judge Arcara’s conduct, it did not reassign the case to a different judge on remand.

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