Harry Sandick, Partner

The Second Circuit issued a published opinion on September 11, 2017  in United States v. Pabon, No. 16-1754 (Cabranes, Livingston, Pauley), a case arising from an interesting set of facts involving the warrantless arrest of an individual suspected of body-packing narcotics who behaved erratically while in police custody.  On appeal, the defendant argued that evidence he had been body-packing narcotics should have been suppressed because it was obtained only after probable cause to detain him had dissipated.  In the alternative, the defendant argued that suppression was warranted because police allegedly failed obtain a probable cause determination from a neutral magistrate in a timely fashion (typically 48 hours). 

On September 18, 2017, in United States v. Caltabiano, No. 16-1275-cr, the Second Circuit (Walker, Lynch, and Lohier, Js.) clarified the jurisdictional scope of a Notice of Appeal.   The Court confirmed its authority to review a criminal appeal notwithstanding errors on a form notice as to the scope of the defendant’s claims.  On the merits, the Court affirmed the conviction and sentence of John W. Caltabiano, Jr.

On September 11, 2017, the Second Circuit (Parker, Carney, Stanceu) reversed by summary order the sentence of the defendant in United States v. Soborski (16-cr-3369).  The panel remanded the case to the U.S. District Court for the Southern District of New York (Swain, J.) for resentencing so that the district court could consider whether Soborski should receive a minor-role reduction under an amendment to the Sentencing Guidelines.

Golb v. Attorney General, No. 16-0452-pr (Jacobs, Leval, Raggi), arises out of unusual facts—forged emails by a proponent of one side of an academic dispute—and reaches an unusual result.  On habeas review, the Second Circuit found that it only owed partial AEDPA deference, and overturned an number of convictions after finding a New York statute unconstitutionally overbroad.  In this case, an advocate of one side of the unresolved academic debate about the authorship of the Dead Sea Scrolls went too far and engaged in illegal acts that brought about his own criminal conviction.  On its face, the decision applies important aspects of New York and federal constitutional law.  However, in a larger sense, the law most relevant to the decision may be Sayre’s Third Law of Politics, which provides that academic policies are the most vicious form of politics because the stakes are so low.

In United States v. Genao, No. 16-924 (Katzmann, Lynch, Chin), the Second Circuit examined the application of the categorical approach to a prior burglary conviction that indisputably involved threats of physical harm but whose minimal elements arguably did not meet the Guidelines’ definition of a “crime of violence.”  The Second Circuit reaffirmed that the categorical approach requires evaluation of the elements of conviction, not the facts of conviction, making it reversible error for the district judge to have “short circuited” the analysis by starting with the facts.  But the Second Circuit emphasized that in an advisory-Guidelines world, the district court is free to take those facts of conviction into account in exercising its discretion to set the final sentence. So long as the sentencing correctly applies and calculates the appropriate Guidelines sentence, the court is then liberated—indeed required—to pick the sentence that it believe best fits the crime.

In a highly anticipated decision, a divided Second Circuit panel (Katzmann, Pooler (dissenting), Chin) today upheld the insider trading conviction of former SAC Capital portfolio manager Mathew Martoma, ruling that the “meaningfully close personal relationship” requirement set out by the Court in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), does not survive the Supreme Court’s decision in Salman v. United States, 137 S. Ct. 420 (2016). See United States v. Martoma, 14-3599 (2d Cir. Aug. 23, 2017).

Last week, in Barinas v. United States, the Second Circuit held that a defendant who is extradited to the United States to face charges, pursuant to agreement with the asylum nation, may not raise the objection that the prosecution exceeds the scope of the extradition agreement or that he is to be tried on charges other than those for which he is extradited.  That objection, known as a “rule of specialty” objection, may be raised only by the asylum nation itself.  The panel also held that when a defendant on supervised release becomes a fugitive, his supervised-release term is tolled during the period of fugitivity.  The impact of this ruling is that a defendant who commits another crime while a fugitive from supervised release can be charged with a violation specification even if, at the time he committed the second crime, his term of supervised release otherwise would have ended.

The Chiclets and Runts vending machine at your local car repair shop last decade may have been one piece of a fraudulent enterprise that ensnarled roughly 7,000 victims.  As CEO of Vendstar, Defendant Edward (“Ned”) Weaver directed a scheme that enticed victims to make substantial up-front investments in quarter-slot candy dispensers with false promises of significant returns—even hundreds of a dollars a day.  Despite assurances that this “home-based vending business” had “little risk,” many customers lost their entire investment.[1]

In United States v. Weaver, 16-3861 (June 21, 2017) (Newman, Cabranes, Lynch), the Court held in a per curiam order that contractual disclaimers signed by victims of Weaver’s fraud did not render the fraudulent statements “immaterial” as a matter of law and negate criminal liability.

On July 19, 2017, in United States v. Allen, et al. (16-cr-98) (Cabranes, Pooler, Lynch), the Second Circuit issued a decision reversing the convictions of defendants Anthony Allen and Anthony Conti for wire fraud and conspiracy to commit wire fraud and bank fraud.  This was the first federal criminal appeal in connection with the London Interbank Offered Rated (“LIBOR”) prosecutions, which involved allegations that various individuals and banks manipulated the LIBOR.  The LIBOR is a benchmark interest rate intended to reflect the available rates at which banks borrow money from other banks; the LIBOR is incorporated into the terms of financial transactions worldwide. We provided a brief summary of the opinion a few hours after the decision was rendered; here is our more detailed summary.

In a decision that will provide reassurance both to prosecutors and to the institutions with whom they enter into deferred prosecution agreements (“DPAs”), the Second Circuit (Katzmann, Lynch, Pooler (concurring)) held in United States v. HSBC Bank USA, N.A., No. 16-308(L), that the periodic reports submitted by an independent monitor responsible for evaluating compliance with a DPA are not “judicial documents” to which the public enjoys a First Amendment right of access.  To reach its holding, the Court was required to address foundational separation-of-powers questions regarding a court’s role in approving and supervising the implementation of a DPA.  The decision, written by Chief Judge Katzmann, will discourage courts from second-guessing decisions made by the executive branch in the legitimate exercise of its prosecutorial discretion.  Along with the Second Circuit’s decision in SEC v. Citigroup Global Markets, Inc., 752 F.3d 285 (2d Cir. 2014), which held that a district court reviewing a proposed SEC consent decree may only reject it under limited circumstances, last week’s decision makes clear that the Second Circuit envisions that district courts will not play a significant role in assessing the fairness of the government’s settlements with financial and other institutions.

This morning the Second Circuit (Cabranes, Wesley, Sessions, D.J.) released an opinion vacating the conviction of Sheldon Silver and remanding the case to the district court for further proceedings including a retrial.  The Second Circuit concluded that the evidence of guilt was sufficient to permit a retrial, but found that the jury instructions did not comport with the Supreme Court’s McDonnell decision and that the error was not harmless. The panel took no joy in rendering its decision, observing that “many would view the facts adduced at Silver’s trial with distaste.”  Nor did the panel blame either the district court or the government for today’s reversal, recognizing that the McDonnell decision—which changed the law of the Circuit—was issued after the Silver trial had concluded.  Nevertheless, the panel felt itself compelled by McDonnell and the facts of the case to decide the matter as it did.

On July 7, 2017, the Second Circuit (Jacobs, Leval, Raggi) issued a short summary order in United States v. Stegemann.  Most of the order is dedicated to affirming the defendant’s conviction at trial on several drug and firearm-related offenses, but at the end the Court reverses the order of forfeiture imposed as part of the defendant’s sentence, in part with the government’s consent.

In United States v. Delacruz, No. 15-4174, the Second Circuit (Kearse, Lohier, Droney) vacated a defendant’s sentence, holding that the district court’s findings supporting the defendant’s failure to accept responsibility were clearly erroneous.  In an opinion by Judge Kearse, the Second Circuit emphasized its precedent that a Sentencing Guidelines reduction for acceptance of responsibility is appropriate where the defendant truthfully admits the conduct comprising the offense of conviction.  It would violate the Fifth Amendment’s Due Process Clause to withhold an acceptance of responsibility adjustment because the defendant denied other conduct that was not proved beyond a reasonable doubt.  Thus, a “good-faith objection to material [presentence report] statements . .  does not provide a proper foundation for denial of the acceptance-of-responsibility credit.”

On June 5, 2017, in an opinion with facts that even the Court seemed to recognize read like the script for a straight-to-video movie, the Second Circuit (Jacobs, Sack, Carney) declined to overturn a defendant’s conviction and 35-year sentence despite the fact that the defendant’s counsel had engaged in an alleged sexual relationship with the defendant’s mother contemporaneously with his representation of the defendant, arguably creating an impermissible conflict of interest in violation of the Sixth Amendment. The Second Circuit deferred the issue of whether the relationship in fact infringed on the defendant’s right to conflict-free representation, reasoning that post-conviction collateral review provided a better avenue to develop a factual record as to the nature and extent of the alleged affair and its impact, if any, on the defendant’s decision to plead guilty.

In a summary order issued on May 24, 2017, Pollard v. United States, 16-2918 (Raggi, Carney, and Kaplan by designation), the Circuit affirmed the decision of the United States District Court for the Southern District of New York ( Forrest, J.), denying Pollard’s habeas corpus petition pursuant to 18 U.S.C. § 2241 to challenge conditions of his parole.  Pollard, arguably one of the most notorious spies in American history, was arrested in 1985 after passing top secret documents to Israel while working as a research analyst for the U.S. Navy.

On May 31, 2017, the Second Circuit issued its long-awaited decision in the “Silk Road” case, United States v. Ulbricht, (15-1815-cr) (2nd Cir. May 31, 2017) (Newman, Lynch, Droney).  The panel affirmed Ulbricht’s conviction and sentence of life imprisonment, identifying no reversible error.  From 2011-2013 Silk Road, which functioned as an “eBay” for drug dealing, generated approximately $183 million in sales of illegal drugs.  Defendant Ross William Ulbricht, who used the pseudonym “Dread Pirate Roberts,” was the owner and creator of Silk Road, and he took a commission on drugs sold through the website.

In United States v. Khalil, No. 15-3819 (2d Cir. May 16, 2017) (Calabresi, Wesley, Lohier), the Second Circuit reversed the defendant’s conviction for transporting an alien within the United States for profit in violation of 8 U.S.C. § 1324(a)(1)(A)(ii) and § 1324(a)(1)(B)(i).  It did so based on the Government’s failure to put forward sufficient evidence at trial to establish that Khalil transported an alien “in furtherance of” the alien’s illegal stay in the United States. 

In a split decision in United States v. Delva, No. 15-cr-683 (Kearse, Winter, Jacobs), the Second Circuit held that the Fourth Amendment allowed law enforcement officers to seize cell phones and a number of letters that were in plain view in the room of a suspect’s home where he was interviewed immediately after an arrest.  The majority opinion, written by Judge Kearse, relied on the “exigent circumstances” doctrine to hold that it was reasonable under the circumstances to hold an interview in the suspect’s home, which allowed the officers to seize incriminating evidence that was in plain view without obtaining a search warrant.  Although the majority opinion is careful to recognize that the exigent circumstances exception requires a case-by-case analysis, the decision extends the infrequently applied exigent circumstances doctrine to a new set of facts.  The decision drew a dissent from Judge Jacobs, who objected to the majority’s reliance on the exigent circumstances doctrine when the government had not raised it in the trial or appellate court, thus denying the defendant any chance to respond to this somewhat novel analysis offered by the Court.

In United States v. Libous, 15-3979 (2nd Cir. May 30, 2017) (Katzmann, Winter, Stein), the Second Circuit vacated the jury conviction of former New York State Senator Thomas W. Libous’ and remanded the case to the district court for dismissal of the indictment and an order to return the $50,000 fine and $100 special assessment to the decedent’s estate.  The short story is that if you die while your appeal is pending, any fine is revoked; if your fine was paid, then the amount is returned to the decedent’s estate.  The Court invites Congress to enact legislation if it is dissatisfied with the result created by this common law rule.

In United States v. Serrano, 16-432-cr; 17-461-cr (Kearse, Calabresi, Cabranes), the Second Circuit denied the defendant’s interlocutory appeal for lack of jurisdiction, holding that the collateral order doctrine is inapplicable to “non-colorable” double jeopardy claims and reaffirming its prior rulings that the denial of a Rule 29 motion does not fall within the scope of the doctrine.  The Court infrequently polices the bounds of its appellate jurisdiction, and so it is useful to have this short decision on the subject of when a defendant may take an interlocutory appeal.

In Reese v. United States, 16-516, the Second Circuit (Pooler, Wesley, Carney) vacated by summary order the order of the U.S. District Court for the Southern District of New York (Marrero, J.) denying Reese’s petition to vacate his conviction and sentence pursuant to 28 U.S.C. § 2255.  Reese claimed that his counsel had provided ineffective assistance, an argument the district court rejected on the grounds that Reese could not establish prejudice because the evidence of guilt presented at trial was “overwhelming.”

In United States v. Yalincak, No. 11-5446 (2nd Cir. Apr. 10, 2017) (Calabresi, Raggi, Lynch), the Second Circuit addressed a complicated issue of appellate procedure in the course of a decision on the law of restitution.  Specifically, the Court weighed in on when a district court’s order crediting a defendant funds against his restitution obligations becomes a final, appealable order that cannot be revisited by the district court.

Yesterday the Second Circuit issued a decision in United States v. Diaz, No. 15-3776 (Walker, Sack, Chin).  In an opinion by Judge Sack, the Court addressed two questions under the Fourth Amendment:  when does a police officer have probable cause to make an arrest under an ambiguous law, and whether an officer can conduct a search incident to arrest if she only intends to issue a citation.

In United States v. Bodouva, 16-3937 (March 22, 2017) (Katzmann, C.J., Pooler and Lynch, J.), the Court held in a per curiam order that a defendant convicted of embezzlement must forfeit the full amount of her illicit gains to the government even after paying restitution to victims.  The ostensibly “duplicative” financial penalty entered against the defendant was not only permissible, but in fact required by statute.  The district court thus appropriately ruled at sentencing that it lacked discretion to modify the forfeiture amount.  With this decision, the Second Circuit joined several other circuits in holding that restitution and forfeiture serve distinct purposes and, absent clear statutory authority to the contrary, may not offset each other.