07-0715-cr(L) USA v. Bell (Brumer)
1 UNITED STATES COURT OF APPEALS 2 3 FOR THE SECOND CIRCUIT 4 5 August Term, 2007 6 7 8 (Argued: May 29, 2008 Decided: June 10, 2008) 9 10 Docket No. 07-0715-cr(L), 07-0716-cr(con) 11 12 - - - - - - - - - - - - - - - - - - - -X 13 14 UNITED STATES OF AMERICA, 15 16 Appellee, 17 18 - v.- 19 20 MICHAEL BRUMER AND LAWRENCE KLEIN 21 Defendants-Appellants 22 23 - - - - - - - - - - - - - - - - - - - -X 24
25 Before: JACOBS, Chief Judge, CALABRESI and SACK, 26 Circuit Judges. 27 28 Appeal from judgments of conviction following guilty
29 pleas. Defendants argue that they are entitled to withdraw 30 their pleas because the government breached the plea 31 agreements and because of procedural defects in the 32 acceptance of the pleas. Defendant Klein also argues that 33 he was denied his Sixth Amendment right to counsel when the 34 district court refused to allow him to substitute counsel. 35 For the following reasons, we affirm.
1 JOHN W. MITCHELL, New York, NY, 2 for Defendants-Appellants. 3 4 ROBIN W. MOREY, Assistant United 5 States Attorney (Marcus A. 6 Asner, Celeste L. Koeleveld, 7 Assistant United States 8 Attorneys, on the brief), for 9 Michael J. Garcia, United States 10 Attorney for the Southern 11 District of New York, New York, 12 NY, for Appellee. 13 14 PER CURIAM:
15 Michael Brumer and Lawrence Klein appeal from judgments 16 entered in the United States District Court for the Southern 17 District of New York (Wood, J.) on January 12, 2007, 18 convicting them, after guilty pleas, of conspiracy to commit 19 mail fraud, health care fraud and making false statements 20 relating to health care matters, in violation of 18 U.S.C. 21 §§ 371, 1341, 1347 and 1035; health care fraud, in violation 22 of 18 U.S.C. §§ 1347 and 2; and conspiracy to violate the 23 Medicare anti-kickback statute, 42 U.S.C. §§ 1320a-7b(b)(1) 24 and 1320a-7b(b)(2), in violation of 18 U.S.C. § 371. 25 I. 26 On appeal, defendants seek to withdraw their guilty 27 pleas principally on the ground that the government breached 28 the plea agreements’ provision requiring the parties to 29 forbear from offering certain sentencing arguments. The 30 government argued for sentence enhancements based on 31 vulnerable victims and use of mass marketing, but claims it
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1 did so only in response to a breach by defendants, who 2 sought a Fatico hearing on the intended loss amount. We 3 review plea agreements de novo and in accordance with 4 principles of contract law. United States v. Griffin, 510 5 F.3d 354, 360 (2d Cir. 2007). “To determine whether a plea 6 agreement has been breached, we ‘look[] to the reasonable 7 understanding of the parties as to the terms of the 8 agreement.’” United States v. Riera, 298 F.3d 128, 133 (2d 9 Cir. 2002) (quoting United States v. Colon, 220 F.3d 48, 51 10 (2d Cir. 2000). “When the Government breaches a plea 11 agreement, the defendant is entitled to either withdraw his 12 plea or have his agreement specifically performed.” United 13 States v. Cimino, 381 F.3d 124, 127 (2d Cir. 2004). 14 The plea agreements provided that “neither party will 15 seek [a downward or an upward] departure or seek any 16 adjustment not set forth herein. Nor will either party 17 suggest that the Probation Department consider such a 18 departure or adjustment, or suggest that the Court sua 19 sponte consider such a departure or adjustment.” As a 20 result of developments arising out of the trial of Brumer’s 21 and Klein’s co-defendants, the government offered to reduce 22 the intended loss amount from the range set forth in 23 Brumer’s and Klein’s plea agreements ($10 million to $20 24 million) to $5 million to $10 million. In so doing, the
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1 government conducted itself in a way that reflected a 2 commitment to a fair outcome; its offer to amend the plea 3 agreements to benefit defendants was not a material breach 4 of those agreements. See New Windsor Volunteer Ambulance 5 Corps, Inc., v. Meyers, 442 F.3d 101, 117 (2d Cir. 2006) 6 (quoting Callanan v. Powers, 199 N.Y. 268, 284, 92 N.E. 747, 7 752 (1910), for the proposition that a breach is material 8 only if it is “‘so substantial and fundamental as to 9 strongly tend to defeat the object of the parties in making 10 the contract.”). 11 Brumer and Klein rejected the offer to amend the plea 12 agreements, advised the district court that the intended 13 loss amount was in dispute, and thereafter requested (and 14 obtained) a Fatico hearing on that issue. At the Fatico 15 hearing, the government lost the benefit of its bargain by 16 being put to its proof. The result was a significantly 17 lower loss amount with a corresponding impact on the 18 ultimate sentence. Defendants thus materially breached the 19 plea agreements, and having done so, relieved the government 20 of its obligations to comply with them. See United States 21 v. Byrd, 413 F.3d 249, 251 (2d Cir. 2005) (per curiam) 22 (“When the defendant is the party in breach, the government 23 is entitled to specific performance of the plea agreement or 24 to be relieved of its obligations under it.”).
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1 The government was within its rights to treat the plea 2 agreements as unenforceable following the defendants’ 3 material breach, and specifically to seek sentence 4 enhancements other than those stipulated. See Cimino, 381 5 F.3d at 128 & n.3 (concluding that defendant’s breach of 6 sentence advocacy prohibition gave government the option of 7 canceling plea agreement or being excused from its 8 reciprocal obligations); see also United States v. El-Gheur, 9 201 F.3d 90, 93-94 (2d Cir. 2000) (holding that defendant’s 10 breach of cooperation agreement absolved the government of 11 obligation to move for downward departure pursuant to 12 U.S.S.G. § 5K1.1); United States v. Merritt, 988 F.2d 1298, 13 1313 (2d Cir. 1993) (“[A] defendant who materially breaches 14 a plea agreement may not claim its benefits.” (citations 15 omitted)). Under the circumstances of this case, the 16 government’s sentence advocacy in contradiction of the plea 17 agreements did not entitle defendants to withdraw their 18 pleas. 19 The district court reached the same conclusion by a 20 different route. The district court ruled that defendants’ 21 request for a Fatico hearing was not a breach, and that the 22 government’s sentence advocacy, if in breach, was moot 23 because the court did not consider it. As a result, the 24 district court imposed a sentence that relied on the lower
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1 loss amount established at the Fatico hearing. The 2 government has not appealed the district court’s ruling on 3 breach, and therefore does not seek specific performance of 4 defendants’ obligations under the plea agreements. 5 Accordingly, although we disagree with the district court’s 6 ruling on breach, we affirm the convictions and sentences 7 imposed. 8 II 9 Brumer and Klein further argue they are entitled to 10 withdraw their pleas because of procedural defects in the 11 acceptance of their pleas, which were conducted by a 12 magistrate judge with defendants’ consent. 13 First, defendants argue that the district judge erred 14 when, outside their presence, she reviewed their plea 15 allocutions and signed the orders accepting those pleas. 16 Section 636(b)(3) of the Federal Magistrates Act permits 17 defendants to consent (as these defendant did) to entry of 18 their guilty pleas in front of a magistrate judge. See 28 19 U.S.C. § 636(b)(3) (permitting assignment of “such 20 additional duties as are not inconsistent with the 21 Constitution and laws of the United States”); see also 22 United States v. Williams, 23 F.3d 629, 632-34 (2d Cir. 23 1994) (holding that Magistrates Act authorizes district 24 court to refer plea allocution to magistrate provided
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1 defendant consents). Defendants do not dispute that the 2 magistrate judge’s conduct of their plea allocutions 3 satisfied the requirements of Fed. R. Crim. P. 11(c). 4 Having consented to this procedure, defendants were not 5 entitled to be present when the district judge reviewed the 6 allocution transcripts and signed the orders accepting the 7 pleas. See United States v. Jones, 381 F.3d 114, 122 (2d 8 Cir. 2004) (right to be present “is triggered only when the 9 defendant’s ‘presence has a relation, reasonably 10 substantial, to the fullness of his opportunity to defend 11 against the charge,’ and there is no constitutional right to 12 be present ‘when presence would be useless, or the benefit 13 but a shadow’” (quoting Snyder v. Massachusetts, 291 U.S. 14 97, 105-07 (1934))). 15 Second, defendants argue that the district court 16 neglected the procedures of 28 U.S.C. § 636(b)(1) and 17 (b)(1)(C), which require, inter alia, filing of proposed 18 findings and recommendations with the court, mailing a copy 19 to all parties, and providing ten days for written 20 objections. However, these requirements apply only to 21 delegations to a magistrate judge pursuant to § 636(b)(1). 22 There are no similar requirements set forth under 23 § 636(b)(3), and there is no basis for judicially engrafting 24 such requirements onto that subsection. See Minetti v. Port
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1 of Seattle, 152 F.3d 1113, 1114 (9th Cir. 1998) (per curiam) 2 (holding that § 636(b)(3) “does not require the magistrate 3 judge to submit proposed findings and recommendations” and 4 “does not provide a party with ten days to file written 5 objections with the district court”). 6 III 7 Klein argues that his Sixth Amendment right to counsel 8 was violated when the district court refused to allow him to 9 substitute retained counsel. 10 “While a defendant has a right to counsel of his choice 11 under the Sixth Amendment, it is not an absolute right. 12 Absent a conflict of interest, a defendant in a criminal 13 case does not have the unfettered right to retain new 14 counsel . . . .” United States v. Paone, 782 F.2d 386, 392 15 (2d Cir. 1986) (citations omitted). “In determining whether 16 to allow a defendant to retain new counsel, the court must 17 consider . . . the risks and problems associated with the 18 delay, and whether substitutions would disrupt the 19 proceedings and the administration of justice.” Id.; see 20 United States v. Llanes, 374 F.2d 712, 717 (2d Cir. 1967) 21 ("Judges must be vigilant that requests for appointment of a 22 new attorney . . . should not become a vehicle for achieving 23 delay."). 24 In May 2006--six years after the indictment in this
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1 case and four years after the guilty pleas--Klein sought to 2 replace his sixth attorney with a seventh. The district 3 court properly weighed the delay and inefficiency that might 4 ensue and disallowed formal substitution, while permitting 5 new counsel to participate in the proceedings. In 6 particular, the district court was concerned that without 7 the involvement of previous counsel, a new lawyer would seek 8 to extend the briefing schedule and would repeat arguments 9 previously heard and rejected. We affirm that the district 10 court’s ruling was well within its discretion. See United 11 States v. Simeonov, 252 F.3d 238, 241 (2d Cir. 2001) 12 (reviewing denial of request to substitute for abuse of 13 discretion). 14 Klein contends on appeal that the district court erred 15 by referencing a four-factor test from United States v. John 16 Doe No. 1, 272 F.3d 116, 122-23 (2d Cir. 2001), which he 17 argues applies only to substitutions of appointed counsel, 18 no personally retained counsel. From our reading of the 19 transcript, however, it is clear that the district court 20 looked to the John Doe No. 1 factors only after determining 21 that allowing the substitution would cause substantial delay 22 and inefficiency. Thus, only as a secondary inquiry did the 23 district court assess whether the conflict between Klein and 24 his then-current counsel “was so great that it resulted in a
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1 total lack of communication preventing an adequate defense,” 2 id. at 122 (internal quotation marks omitted), to ensure 3 that any conflict was not interfering with effective 4 representation. Although delay is generally a valid reason 5 to deny a motion to substitute counsel, it is not 6 necessarily valid where counsel is shown to be providing 7 constitutionally ineffective representation. Cf. Daniels v. 8 Woodford, 428 F.3d 1181, 1200 (9th Cir. 2005) (“Even if the 9 trial court becomes aware of a conflict on the eve of trial, 10 a motion to substitute counsel is timely if the conflict is 11 serious enough to justify the delay.”). 12 We also conclude that United States v. Gonzalez-Lopez, 13 548 U.S. 140 (2006), does not require a different result. 14 In that case, the government conceded that the district 15 court erred in refusing to allow the defendant to substitute 16 counsel, and in barring the proposed new counsel from any 17 contact with the defendant. At issue was only whether the 18 ruling violated the defendant’s Sixth Amendment right to 19 counsel in the absence of a finding of ineffectiveness, or 20 prejudice to the defendant. The Court held that “[w]here 21 the right to be assisted by counsel of one’s choice is 22 wrongly denied, . . . it is unnecessary to conduct an 23 ineffectiveness or prejudice inquiry to establish a Sixth 24 Amendment violation.” Id. at 148.
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1 At the same time, the Supreme Court cautioned that the 2 right to counsel of choice is not absolute, and is limited 3 by “the authority of trial courts to establish criteria for 4 admitting lawyers to argue before them.” Id. at 151. The 5 Court “recognized a trial court’s wide latitude in balancing 6 the right to counsel of choice against the needs of 7 fairness, and against the demands of its calender,” id. at 8 152, and upheld a trial court’s “power to enforce rules or 9 adhere to practices that determine which attorneys may 10 appear before it, or to make scheduling and other decisions 11 that effectively exclude a defendant’s first choice of 12 counsel,” id.. The district court here did not exceed the 13 latitude afforded it under Gonzalez-Lopez when the court 14 struck the balance in favor of retaining Klein’s sixth 15 lawyer while permitting the seventh to participate. 16 17 For the foregoing reasons, the order of the district 18 court is affirmed. The mandate shall issue forthwith.