Court Eases Sentence Rules For Cooperation

A federal appeals court loosened the sentencing standards last month for criminal defendants who cooperate with government authorities—even if prosecutors don’t ask for leniency when judges dole out a sentence.

The 2nd Circuit Court of Appeals in New York, ruling in the case of a woman who cooperated with federal prosecutors in a narcotics probe, said district court judges should have more leeway to consider a defendant’s cooperation even if prosecutors do not submit a so-called “5K letter,” which authorizes a sentence reduction. Until now, judges have had little room to maneuver in sentencing a cooperative defendant.

Musoff

“It’s undeniable that this is a major decision,” says Jay Musoff, a partner at Orrick, Herrington & Sutcliffe and a former assistant U.S. attorney for the Southern District of New York. “It opens a new avenue for all defendants facing sentencing to seek a non-Guidelines sentence.”

Under Section 5K-1.1 of the U.S. Sentencing Guidelines, when federal prosecutors decide a defendant has substantially helped them in the investigation of another person, they can send a letter to the judge informing him of the defendant’s cooperation—but issuing a 5K letter is discretionary, and prosecutors can decide not to issue one for numerous reasons. For example, a cooperating defendant may not have enough information about other offenders, or might be considered an unsatisfactory trial witness due to credibility concerns.

In the 2nd Circuit’s decision, United States v. Fernandez, the defendant, Mayra Fernandez, contended that her sentence for participation in a drug distribution ring was too harsh. One argument her lawyers made in their appeal: that the district court had ignored relevant facts and circumstances about Fernandez, including cooperation with the government that didn’t result in a 5K letter.

Some experts say the Fernandez decision has particular applicability to white-collar crime, since prosecutors often rely heavily on cooperating witnesses in white-collar cases.

While the appeals court concluded that Fernandez failed to show her sentence was unreasonable and affirmed the district court’s judgment, it also ruled that sentencing judges can reduce a defendant’s sentence on the basis of the defendant’s cooperation with the authorities even when the government doesn’t issue a 5K letter, coining the phrase “non-5K cooperation.”

According to the 2nd Circuit, sentencing judges are required by statute to consider the history and characteristics of a defendant when determining a criminal sentence. Since the statute is broadly worded, there are no express limits on what information a judge could consider.

Croffoot-Suede

“It’s fairly strong for the court to instruct judges to take non-5K cooperation under advisement,” says Lance Croffoot-Suede, a lawyer with White & Case who led Fernandez’ appeal. On the other hand, he adds, the court “also says that if [judges] do, the court won’t second-guess them.”

“This makes it interesting for all the players,” Musoff says. “There can now be a dance between defendants and prosecutors as to how much cooperation they’re willing to give and accept. The government isn’t the only show in town.”

Some experts say the Fernandez decision has particular applicability to white-collar crime, since prosecutors often rely heavily on cooperating witnesses in white-collar cases. “There’s no question that in the white collar arena, this is going to be an issue almost all of the time,” since the defendants in those cases often cooperate, Croffoot-Suede says.

Ellen Podgor, a former deputy prosecutor and defense attorney who now teaches law at Stetson University, says that for white-collar crime “this may prove significant in sentencing decisions, especially for those who want to reduce a sentence but are not privileged enough to receive a 5K1.1 substantial assistance motion from the government.” Still, she adds, it’s unlikely that judges will significantly depart from the guidelines, since “the culture to adhere is there.”

Balancing Leniency

Exactly how often judges will avail themselves of their newfound discretion is unclear. Musoff says he expects the immediate impact to be felt more in traditional non-white collar cases, since “there are more opportunities in those cases to provide a little bit of cooperation.”

EXCERPTS

Below are excerpts from the appellate court's decision on the Fernandez case:

[W]hile we review a sentence for reasonableness, that review involves consideration not only of the sentence itself, but also of the procedure employed in arriving at the sentence. Reasonableness review does not entail the substitution of our judgment for that of the sentencing judge. Rather, the standard is akin to review for abuse of discretion. Thus, when we determine whether a sentence is reasonable, we ought to consider whether the sentencing judge “exceeded the bounds of allowable discretion[,] … committed an error of law in the course of exercising discretion, or made a clearly erroneous finding of fact.”

We recognize that in the overwhelming majority of cases, a Guidelines sentence will fall comfortably within the broad range of sentences that would be reasonable in the particular circumstances … Nonetheless, we have expressed a commitment to avoid the formulation of per se rules to govern our review of sentences for reasonableness. We therefore decline to establish any presumption, rebuttable or otherwise, that a Guidelines sentence is reasonable …

Fernandez argues that the District Court “may not have appreciated its discretion to consider Ms. Fernandez’s cooperation with the government” pursuant to 18 U.S.C. § 3553(a)(1). According to Fernandez, even though the Government did not make a motion regarding substantial assistance pursuant to U.S.S.G. § 5K1.1, she may nonetheless benefit from her efforts to cooperate insofar as they shed light on her “history and characteristics.”

At Fernandez’s sentencing hearing, the Government conceded that “under 3553(a) the Court’s empowered to consider virtually any factor in sentencing.” We agree that in formulating a reasonable sentence a sentencing judge must consider “the history and characteristics of the defendant” within the meaning of 18 U.S.C. § 3553(a)(1), as well as the other factors enumerated in § 3553(a), and should take under advisement any related arguments, including the contention that a defendant made efforts to cooperate, even if those efforts did not yield a Government motion for a downward departure pursuant to U.S.S.G. § 5K1.1 (“non-5K cooperation”).

Section 3553(a)(1), in particular, is worded broadly, and it contains no express limitations as to what “history and characteristics of the defendant” are relevant. This sweeping provision presumably includes the history of a defendant’s cooperation and characteristics evidenced by cooperation, such as remorse or rehabilitation.

Source

U.S. v. Fernandez (April 3, 2006)

Harlan Protass, criminal defense attorney at O’Shea Partners, agrees: “It’s unlikely that many district court judges will avail themselves of the opportunity to impose a non-Guidelines sentence based on non-5K cooperation.”

Still, Protass notes that the finding does “open the door for arguments on behalf of defendants who, for example, may have offered cooperation that the government for one reason or another declined, and for defendants who entered into cooperation agreements with the government that were subsequently terminated because of a violation of the terms of such agreements.”

Podgor

Podgor says the decision is important for another reason. “This case is a step in the right direction of having the three branches [of government] properly balanced,” she says. The language in the decision “removes some of the prosecutorial power in being the exclusive body that could authorize a departure outside the guidelines. It places some of this power in the hands of the judiciary.”

In its decision, the Second Circuit also held that it has the power to review district court criminal sentences to see whether they’re reasonable. The judges decreed that whenever a defendant challenges the procedures of a sentencing or the reasonableness of a sentence imposed, he essentially is claiming the sentence “was imposed in violation of the law … We therefore have authority to review sentences, whether Guidelines sentences or non-Guidelines sentences, for reasonableness.”

That language opens the door to more appellate review of district court sentences, Croffoot-Suede says. “The Second Circuit made the explicit point that there will be no presumption that a criminal sentence is reasonable simply because a judge calculates it according to the relevant federal sentencing guidelines range.”

“This ‘puts to bed’ for the Second Circuit that which the DOJ has been advocating nationwide: that appellate courts have no jurisdiction to review within Guidelines sentences,” Protass adds.

Croffoot-Suede says the decision grants judges more flexibility in sentencing for both individuals and corporations. For example, defense attorneys can now ask sentencing judges to consider a defendant’s cooperation if he or she offered assistance and the government declined, or if the defendant entered into a cooperation agreement that the government later terminated. In certain cases, they may also ask appellate courts to review a criminal sentence for fairness even if the sentence calculation falls within the appropriate range of the federal sentencing guidelines.

“It’s fair to presume that courts will need to consider the import of Fernandez when imposing sentences on corporations,” Croffoot-Suede says. The corporate sentencing guidelines have a provision, similar to 5K, that allows judges to consider a corporation’s cooperation, upon the filing of a proper motion by the government. “Now, even if the government doesn’t file this motion for a corporate defendant, we may be able to argue, based on Fernandez, that the court should nonetheless consider the corporation’s cooperation and reduce its penalties,” he says.

Croffoot-Suede says the ruling’s origin in the Second Circuit is also significant, since many white-collar investigations and criminal prosecutions take place in New York. “The Second Circuit’s decision may influence other federal courts in cases with similar issues,” he says.