United States v. McCoy

313 F.3d 561, 354 U.S. App. D.C. 111, 2002 U.S. App. LEXIS 26445, 2002 WL 31840879

Opinions

Opinion for the Court filed by Senior Circuit Judge WILLIAMS.

Dissenting opinion filed by Circuit Judge HENDERSON with whom Chief Judge GINSBURG and Circuit Judge SENTELLE join.

STEPHEN F. WILLIAMS, Senior Circuit Judge:

We here address the scope of resentenc-ing after a remand from- the court of appeals under the following conditions: (1) the defendant seeks to raise a contention that was contingently relevant in the ini tial sentencing (but the contingency did not then materialize); (2) defendant did not raise the contention in that sentencing; and (3) the district court’s action on remand renders the contention determinative (if it is allowable and correct). The source of the contingency here is the Sentencing Guidelines’ complex treatment of multiple “groups” of offenses. See U.S.S.G. § 3D1.4.

We conclude that the defendant’s ability to raise her contingent issue here depends upon whether she could establish “good cause,” within the meaning of Rule 32(b)(6)(D) of the Federal Rules of Criminal Procedure, for not having raised it sooner. The district court never considered the good cause issue. Rather than remand to the district court, however, we remand to the panel. If it finds that the merits claim is not a winner, there will be no need for the district court to take the matter up yet again.

JoAnn McCoy was convicted on two charges of making false statements in a loan application and on one count of perjury. Her case was referred to a probation officer, and the process of generating a Presentence Report (“PSR”) proceeded along the lines prescribed by Rule 32(b)(6) (renumbered as Rules 32(e)-(g), per amendments effective December 1, 2002). The probation officer circulated a PSR (the “original PSR”) to the defendant and counsel on both sides, see Rule 32(b)(6)(A), and the prosecution and the defense both objected to various aspects, see Rule 32(b)(6)(B). The most critical objection was the prosecution’s request for an enhancement for obstruction of justice, to be applied to both the crime “groups” (false statements and perjury). The probation officer added the enhancements and circulated a new version of the PSR (the “revised PSR”) on January 22, 1999. See Rule 32(b)(6)(C).

The revised PSR calculated a “combined” offense level of 21. Twenty levels derived from the two false statement counts — the false statement “group” for purposes of the multi-group adjustment. U.S.S.G. § 3D1.4. These 20 levels comprised 14 for the base offense and the size of the loss, plus three upward adjustments of two levels each — for McCoy’s “managerial role” in directing other participants, for her “more than minimal planning,” and for her obstruction of justice.

The second “group” was for McCoy’s perjury conviction and totaled 14 levels, 12 for the base offense and two for obstruction of justice, and to a term of supervised release.

Finally, the revised PSR combined the two groups under “multiple count adjustment” provisions of U.S.S.G. § 3D1.4, adding one point to the false statement group for a “combined offense level” of 21. Simplifying the arcane formula of § 3D 1.4 for purposes of this case, we may say that it calls for no upward adjustment of the count for the more serious group if the difference between the two groups is nine or more levels, a one-point upward adjustment if the difference is five to eight levels, and a iwo-level adjustment if the difference is zero to four levels. The logic of this is plainly that as the severity of the less serious group gets closer to that of the more serious, it becomes appropriate to add, and to add more, to the combined offense level.

Once the revised PSR was circulated, both sides commented on the probation officer’s recommendation, through memo-randa and at the sentencing hearing itself, as provided by Rule 32(c)(1). McCoy objected to all the enhancements, including the ones for obstruction of justice. She did not, however, object to the obstruction enhancement on a ground that was specific to the perjury group. Application Note 7 of the Guidelines section governing obstruction, U.S.S.G. § 3C1.1, explains that for a limited number of crimes, including perjury but not false statements, the obstruction bump should not be added unless “a significant further obstruction occurred during the ... prosecution ... of the obstruction offense [here perjury] itself.” Victory on a potential Application Note 7 argument would have been useful if but only if other sentencing adjustments had occurred yielding a particular alignment of the two groups (as a practical matter, a gap of three or four levels, as opposed to the initial gap of six).

The district court . rejected all of McCoy’s objections and sentenced her to concurrent terms of 37 months on the false statement charges and 24 months on the perjury charge.

McCoy appealed her conviction, objecting to all the enhancements, see United States v. McCoy, 242 F.3d 399, 403 (D.C.Cir.2001) (“McCoy I”) but again not raising the perjury-specific attack on the obstruction enhancement. Absent a change in the constellation of groups, lopping a couple of levels off the perjury calculation was of no moment. As it turned out, she did prevail on one enhancement, persuading us that the district court might well have applied an incorrect standard in assessing the “managerial role” bump. Id. at 410. Accordingly we remanded to the district court to reconsider that issue. Id. at 411.

On remand, the district court instructed the probation officer to update the PSR in light of McCoy I, and the probation officer read that decision as holding that no managerial role enhancement should apply. The government acquiesced in the elimination of that enhancement, and the probation officer prepared an updated version of the PSR (the “resentencing PSR”) that reduced to 18 the sentencing level for the false statement offense. But now the gap between the more serious and the less serious groups was four points instead of six, so the proper multi-group adjustment was two points instead of one. Absent further changes, the combined offense level would be 20.

When the probation officer circulated the resentencing PSR reflecting the elimination of the managerial role bump and the higher multi-group adjustment, McCoy raised her perjury-specific attack on the obstruction enhancement. Victory on this issue would now be determinative. Overturning that enhancement would restore a six-point gap, causing the overall offense level to settle at 19 points. The government does not deny that within the resen-tencing procedure McCoy’s claim was timely and in compliance with Rule 32.

The government objected, however, on the ground that McCoy had not raised the point in her first appeal. McCoy responded that at the time of that appeal, victory on the perjury-specific issue would have had no direct consequence. The district court did not address either of these arguments, but ruled simply that “the only issue presently before the court” was to “resentence without the two-level [managerial role] enhancement.”

On McCoy’s ■ second appeal the major issue was how to apply our precedent, United States v. Whren, 111 F.3d 956 (D.C.Cir.1997), to these facts. There we had said that on a remand for resentencing the district court “may consider only such new arguments or new facts as are made newly relevant by the court of appeals’ decision — whether by the reasoning or by the result.” Id. At 960. The panel divided over the question whether an argument that in the first sentencing had been po tentially relevant, but never immediately so, qualified as “newly relevant.” See United States v. McCoy, 280 F.3d 1058, 1062 (D.C.Cir.2002) (“McCoy IF). We granted McCoy’s petition for rehearing en banc to clarify the court’s position on that issue.

Before turning to the merits we note that the government objected to rehearing en banc on the ground that McCoy’s completion of her prison sentence had mooted the issue. But the controlling statutes explicitly make the Guidelines computation relevant to McCoy’s supervised release, which persists to this day:

Factors To Be Considered In Including a Term Of Supervised Release. The court, in determining whether to include a term of supervised release, and, if a term of supervised release is to be included, in determining the length of the term and the conditions of supervised release, shall consider the factors set forth in section 3553(a)(1), (a)(2)(B), (a)(2)(C), (a)(2)(D), (a)(1), (a)(5), and (a)(6).

18 U.S.C. § 3583(c) (emphasis added). The most obviously relevant cross-referenced section is § 3553(a)(4)(A), which refers to “the applicable category of offense committed by the applicable category of defendant as set forth in the guidelines issued by the Sentencing Commission.... ” Id. § 3553(a)(4)(A). Resentencing under a revised Guidelines computation clearly cofild benefit McCoy.

The government argues that McCoy should be barred by her failure to raise the Application Note 7 argument on her initial appeal. But Whren was clearly directed to the defendant’s failure to raise an issue “at the original sentencing hearing,” 111 F.3d at 959, not omission from a prior appeal. We see no basis for finding waiver from failure to raise before the appeals court an issue on which the district court never ruled and which never became determinative before the district court. Such a rule would require appellants to include a wide range of purely contingent arguments. Since appeals are only rarely successful — in this circuit, only 12.9% of all appeals result in a reversal of the district court, and nationally, this figure falls to 9.5%, see Judicial Business of the U.S. Courts 102 tbl. B-5 (2000) — the resulting clutter of appellate briefs would be considerable. Although not treating an omission as a waiver will occasionally cause the court to hear an otherwise unnecessary successive appeal, the gain in simplification of initial appeals seems to us well worth it.

Turning to the issue of the initial sentencing itself, the government argues that under Rule 32 of the Federal Rules of Criminal Procedure McCoy’s failure to raise the Application Note 7 argument there operated as an effective waiver of that argument. Although the government didn’t raise Rule 32 earlier, the Whren test must be understood in light of that rule, and both parties have articulated their views of the Rule’s role. We therefore take it into account in resolving the case.

The government specifically invokes Rule 32(b)(6)(B), but this is plainly wrong. At that stage the defendant had before her only the original PSR, which did not propose any bump for obstruction at all. Rule 32(b)(6)(B) only requires a party to “communicate ... any objections to ... sentencing classifications ... contained in or omitted from the presentence report,” not objections to adverse classifications as yet unmentioned.

But defendant still had an opportunity to raise her present objection to the ob struction bump. Rule 32(c)(1) (renumbered as Rule 32(i)) requires the district court to give the parties “an opportunity to comment on the probation officer’s determinations and on other matters relating to the appropriate sentence.” In fact McCoy exercised this opportunity as to many objections — between the filing of the revised PSR on January 22, 2000 and the actual sentencing on June 3, 2000.

Rule 32(c)(l)’s language, quoted above, provides a broad opportunity to comment, and we think McCoy’s perjury-specific contention clearly qualified. It had the potential to affect her sentence. And we note that Rule 32(c)(1) anticipates that objections not immediately affecting the sentence will be made, for its third sentence instructs the district court that it must, “[f]or each matter controverted ... make either a finding on the allegation or a determination that no finding is necessary because the controverted matter will not be taken into account in, or will not affect, sentencing.” Id.

But McCoy’s failure to raise the claim in time for the sentencing hearing does not necessarily mean that she has lost the point forever. Rule 32(b)(6)(D) (renumbered as Rule 32(i)(l)(D)) provides that “[f]or good cause shown, the court may allow a new objection to be raised at any time before imposing sentence.” Although this subsection’s location as a part of Rule 32(b)(6) might suggest that it refers only to points that parties failed to make at the Rule 32(b)(6)(B) opportunity, both common sense and the language “at any time” indicate a broader coverage.

To be sure, it may be fairly uncommon for an omission at the Rule 32(c)(1) stage to be even susceptible to the possibility of relief under the “good cause” standard of Rule 32(b)(6)(D). Typically the next stage after that opportunity will be appeal, in which a party’s previously omitted claims will be governed by the plain error standard. But it is easy to imagine a case where the opportunity provided by Rule 32(c)(1) involves multiple stages, e.g., a briefing schedule that follows the usual court of appeals pattern (opening-response-reply). And here, of course, a re-sentencing follows the defendant’s neglect of her Rule 32(c)(1) opportunity. We see no reason why omissions occurring at the Rule 32(c)(1) stage should be governed by a standard more severe than good cause, unless of course there is some affirmative reason for a more demanding standard. Compare, e.g., Johnson v. United States, 520 U.S. 461, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997) (applying plain error standard on appeal in reviewing a determination of the trial court to which defendant did not object, but which was declared erroneous between trial and appeal); United States v. Dale, 140 F.3d 1054, 1056 (D.C.Cir.1998) (“cause and prejudice” standard governs an argument raised for the first time on collateral review and based on a rule adopted after the conclusion of the direct appeal).

Thus a proper application of Rule 32 required the district court in resentencing to decide whether McCoy’s failure to raise her Application Note 7 argument was “for good cause shown.” We need not address how that standard would have applied if the issue had arisen in the initial sentencing, i.e., if the district court had initially accepted defendant’s position on the managerial role bump. We confine ourselves to the good cause issue as it arose at resen-tencing.

Although the phrase “good cause” might suggest that the inquiry concerns only the grounds for the defaulting party’s omission, in practice “good cause” inquiries typically range more broadly, addressing (for instance) adverse effects — direct or systemic — on opposing parties or the judi ciary. See United States v. Cray, 47 F.3d 1203, 1206-07 (D.C.Cir.1995) (holding that the inquiry for the withdrawal of a guilty plea, characterized as an issue of “good cause,” includes consideration of “whether the Government would have been substantially prejudiced”); cf. Yesudian ex rel. United States v. Howard Univ., 270 F.3d 969, 971 (D.C.Cir.2001) (assessment of “excusable neglect” takes into account the “potential impact on judicial proceedings”). In the present context, at least the following factors — many pressed by the parties, though to be sure primarily as arguments in the interpretation of Whren — would seem relevant to the court’s exercise of discretion:

Against a finding of good cause: (1) To the extent that resolution of the contention required the district court to conduct any factual analysis,'as McCoy claims, loss of the benefit of the district court’s fresh recollection of the trial would be relevant. (2) If the defendant withheld the claim for strategic reasons (as the government claims, offering in support only a possible contradiction between the Application Note 7 argument and McCoy’s sufficiency argument against both obstruction bumps), it would count against finding good cause.

In favor of a finding of good cause: (1) As the initial sentencing played out, the Application Note 7 claim would not have been determinative at any time in that sentencing. (2) The claim was doubly contingent, in that it would have been moot if defendant had won all her stated points in the initial sentencing and under several varieties of partial victory (e.g., if the court had ruled in her favor on the evidentiary basis of the obstruction bump, or, indeed, any partial victory except those which left the gap between the offense levels at three or four). (3) Addressing the claim on the merits will have no material effect on any party’s future incentives, as only a small fraction of judgments are reversed on appeal, and parties thus have strong incentives to raise their sentencing objections early. (4) A person’s liberty is at stake.

Factors that could work against the admission of the new objection, but are absent here: (1) Requirements of additional fact-finding. The issue here required no new fact-finding, as it turned on the legal analysis of what constitutes a “significant further obstruction,” and, in defendant’s view, on a comparison of the offense conduct with defendant’s testimony at trial. (2) Disruption of proceedings. In the scenario in which it arose, consideration of the Application Note 7 argument would not have interrupted any proceeding in the slightest. (3) Prejudice. Its consideration on resentencing would not have prejudiced the government in any way.

A requirement that the district court consider such factors as these in applying Rule 32(b)(6)(D) does nothing to disturb Whren’s principle that parties should raise at sentencing the objections that they have “reason” to raise. Whren, 111 F.3d at 960. But incentives to raise an issue have different strengths, and nothing in Whren suggests that parties must be considered to have “reason” to raise a doubly contingent objection for which the likelihood of any significance is remote. Since an absolute requirement to raise all objections (regardless of the degree of relevance) is likely both to waste judicial resources and work injustice, we have no basis for imposing such a rule, and indeed are barred from doing so under Rule 32(b)(6)(D) as we understand it.

In this case, we think it clear that a district court finding of good cause would not have been an abuse of discretion. We need not in the end decide whether the opposite, a finding of no good cause, would have been an abuse of discretion. The Application Note 7 claim has already been presented to the panel in McCoy II, and, if it should lack merit, there will be no need either for an initial good cause ruling by the district court or any review for abuse of discretion. Given the very high probabilities (cited above) that a substantive claim will not prevail, passing that issue back to the panel is likely to consume fewer judicial resources than would a remand to the district, court. Accordingly we remand the case to the panel for further proceedings consistent with this opinion.

We understand .that district judges’ individual experience may incline them to different preferences as between a high degree of assurance that even contingent issues are raised early (at the expense of more time spent either resolving them or at least recognizing that the contingency has not materialized) and a low of degree of assurance (with a higher risk of interruptions for late-raised issues and of successive hearings for a single defendant). District judges may adopt standing orders to guide practitioners. See Fed.R.Crim.P. 57(b) (allowing judges to “regulate practice in any manner consistent with federal law, these rules, and the local rules of the district”).

We note in closing that even an unexcused failure to raise a claim at sentencing would not automatically bar its consideration on appeal. As we said in Whren, such a claim is still subject to review for plain error. Ill F.3d at 960. Moreover, because the impact of a sentencing error tends to be more obvious than that of the typical trial error, and the consequences of a reversal and remand less disruptive, the finding of “prejudice” necessary for plain error review is more readily made. See, e.g., United States v. Saro, 24 F.3d 283, 287-88 (D.C.Cir.1994).

The case is remanded to the panel.

So ordered.