We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.
SUPREME COURT TO REVIEW FELON-IN-POSSESSION STATUTE
The felon-in-possession statute, 18 USC 922(g)(1), makes it illegal for a convicted felon to possess a gun or ammo. But the statute does not specify a punishment. Instead, 18 USC 924(a)(2) provides the 10-year maximum for anyone who knowingly violates the F-I-P statute.
But what do you have to know? Do you have to know you’re breaking the law? Know that you are a convicted felon, or that what you possess is really a gun? Or just know that whatever it is, you possess it?
The Supreme Court granted review to a case that explores the mens rea requirement for the F-I-P statute a case which has implications for thousands of people convicted of being felons-in-possession, as well for the general issue of mens rea requirements for federal criminal statutes. The implications for people serving time for such convictions could be significant.
Certiorari was also granted in a case asking whether generic burglary requires proof that a defendant intended to commit a crime at the time of unlawful entry or whether it is enough that the defendant formed the intent to commit a crime while “remaining in” the building or structure. Two circuits hold the defendant has to intend to commit a crime as he or she enters. Four hold that it’s burglary even if a defendant can enter the structure with a pure heart, and only later decides to commit a crime.
Because burglary is a crime of violence offense for both the Armed Career Criminal Act conviction and the Guidelines career offender label, the holding could be important for a lot of people now doing time.
It is unclear whether the cases will be decided by June or will go into the the next term starting in October 2019.
We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.
ARE POLITICS KILLING HOPES FOR PRISON REFORM?
Legislators and interest groups on both sides of the current Senate tussle over whether to pass the FIRST STEP Act or the Sentencing Reform and Corrections Act of 2015 continue to stake out their positions, and concern is rising that the political bickering may doom both bills.
Some complain that FIRST STEP is far from perfect… so we should wait for the next bus.
It has now been nearly two months since FIRST STEP passed the House by a huge margin and it has now been more than five months since the SRCA, sponsored by Sens. Charles Grassley (R-Iowa) and Richard Durbin (D-Illinois), passed the Senate Judiciary Committee by a significant margin.
Last week, two executives from the conservative reform group FreedomWorks complained in Washington Examiner that “the FIRST STEP Act hasn’t moved in the Senate. [The bill], led by Sens. John Cornyn, R-Texas, and Sheldon Whitehouse, D-R.I., has been referred to the Senate Judiciary Committee. Grassley has said that at least some SRCA-style sentencing reforms would have to be added to the FIRST STEP Act before it can move forward.”
Few in the Senate question the merits of FIRST STEP. An earlier version of the bill was passed by the Senate Judiciary Committee 15-2 in 2014. But politics could condemn any criminal justice reform. “Democrats,” the FreedomWorks piece said, “with their eyes on the party’s presidential nomination view criminal justice reform as a campaign issue. Selfishly killing the FIRST STEP Act for little more than political gain risks infecting criminal justice reform with the same toxicity that has plagued immigration reform proponents, not to mention that it also denies much-needed relief to communities, families, and individuals who have been severely affected by crime.”
The FreedomWorks officials said the next step must be to strike a deal in the Senate that will add modest sentencing reforms to make the legislation acceptable to Grassley without dividing the Republican conference. If there is any infighting among the Republicans, Senate Majority Leader Mitch McConnell will be unwilling to bring the bill to the floor for a vote. “It is a delicate balance to strike,” the FreedomWorks executives said, “but the Senate, which often refers to itself as the greatest deliberative body in the world, should be up for the challenge. On bipartisan legislation that has the backing of the White House, working out a deal on FIRST STEP should be a layup.”
These days, passage of any federal criminal justice reform seems to be more like a three-pointer from mid-court. Last week, Grassley and Sen. Orrin Hatch (R-Utah) doubled down on their SRCA position in an opinion piece in the Washington Examiner, urging passage of both mens rea reform and the SRCA:
Mens rea reform, in addition to sentencing and prison reform, is an essential part of the criminal justice reform constellation… We firmly believe that mens rea reform is an important piece of the broader criminal justice reform landscape. Together with the bipartisan Sentencing Reform and Corrections Act, which we both support, the Mens Rea Reform Act will improve fairness and clarity in our criminal justice system.
Grassley, current chairman of the Senate Judiciary Committee, and Hatch, a former chair of that Committee, are both legislators with more-than-average juice in the Senate. Grassley may be able to trade his current importance to the White House (as chair of Judiciary, he is key to getting Judge Brett Kavanaugh through the Supreme Court confirmation process) for Trump pressuring McConnell to bring SRCA to a vote. But although Washington is sweltering under the July sun and the end of the year seems far off, there are not that many legislative days left in the calendar year. Something needs to happen soon.
Meanwhile, the interest groups continue to check in, adding to the chaos. Last week, two police chiefs – one from the D.C. metro police force and the other, a former chief of New Orleans and Nashville – wrote in The Hill that “police and prosecutors need Congress to take meaningful action, like moving forward with a bipartisan solution hammered out by Grassley and Durbin. The Sentencing Reform and Corrections Act would shorten unnecessarily long sentences for low-level offenses, while also improving prison conditions and reentry services for men and women coming home from prison.”
Such public pressure does not much help to convince McConnell that scheduling either bill for a vote – likely, a showdown risking Republican fratricide – is a good idea.
Other criminal justice reformers are taking shots at FIRST STEP. DeAnna Hoskins, the president of JustLeadershipUSA, a progressive criminal justice reform group, blasted FIRST STEP last week, arguing, “The need and demand for reform are real. The FIRST STEP Act is not only a step backward; it invites a scary future. We need good proposals that address the structural racism baked into our justice system. We can pursue good proposals at all levels of government — proposals that are human-centered, values-driven, and that truly have an impact on decarcerating and decriminalizing communities across the country.”
She dismisses FIRST STEP’s process that lets inmate earn more halfway house and home confinement time. “For those released from prison on credit time, an electronic shackle awaits,” she writes, “branding people with a tool that tracks their every movement, expands the carceral state into our neighborhoods and significantly lowers the threshold for reincarceration.”
Our observation is that, lucky for her, Ms. Hoskins probably has never done federal time. Had she been a guest of the BOP, she would understand that just about every inmate in the system would gladly have the “carceral state” expanded into his or her home neighborhood by doing as much incarceration time at home – ankle bracelet and all – as possible. One inmate told us, “The best day I ever had locked up was worse than the worst day I ever spent at home.”
Ohio State University law professor Doug Berman, writing in his Sentencing Law and Policy blog last week, complained that Grassley and Durbin are hurting momentum. “At this point I am eager to hear any news about any movement in the Senate with respect to the FIRST STEP Act or the Sentencing Reform and Corrections Act… Prez Trump has suggested he will sign whatever bill gets delivered to his desk. But as the summer marches on, I am struggling to remain optimistic that the full Senate will get to vote on any of these reform proposals anytime soon.”
At the same time, Berman denounced Hoskins’ buzz-word policy nonsense. Her blather (although Prof. Berman is more polite in his terminology) is “disturbing hyperbole… Like the author here, I would like to see reform that goes beyond the FIRST STEP Act. But broader reforms have been stalled by leaders in DC who are likely to be in place at least until 2020 if not later. Hoping and waiting for something better leaves current prisoners and their families waiting and waiting and waiting… But rather than seeing a politic consensus for “transforming our criminal justice system,” I just see a lot of political division among advocates for reform that seems to be making achieving any reform that much harder.”
We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.
The Sentencing Reform and Corrections Act of 2017 (S.1917) is currently before a subcommittee of Senator Charles Grassley’s Judiciary Committee, but we’ve been there before. The 2015 version of the SRCA was approved by the Judiciary Committee, only to die on the Senate floor because leadership refused to bring it to a vote during a presidential election season.
Sen. Charles Grassley (R-Iowa), the man with his hand on the Judiciary Committee throttle.
What is lost in the story of the 2015-16 attempts to pass SRCA is that the bill that came out of the Committee was not the same bill that went in. Instead, a lot of the retroactivity written into the bill as drafted was taken out to please law-and-order conservatives like then-Sen. Jefferson Beauregard Sessions III (now Attorney General) and Sen. Tom Cotton (R-Arkansas).
Sen. Grassley, one of the SRCA sponsors, said at the Advancing Justice conference that the drafters of SRCA17 “kept the package balanced,” taking into account the views of the prior bill’s critics. He said that to those “wanting reasonable compromise, we will be willing partners.”
Sen. Grassley cited a number of pending criminal justice reform bills, including the Smarter Sentencing Act (S.1933), the Mens Rea Reform Act(S.1902) and the CORRECTIONS Act (S.1994), implying that one comprehensive piece of sentencing reform legislation may emerge from the Judiciary Committee that includes pieces of many or all of these bills.
Sen. Grassley’s favorable reference to the Smarter Sentencing Act is a lot different from what he thought two years ago, when he denounced “the arguments for the Smarter Sentencing Act [as] merely a weak attempt to defend the indefensible.” In fact, his complaint that mandatory minimum laws are “too severe” and give prosecutors too much discretion is a major change from 2015, when he complained in a Senate speech about the dangers of the “leniency industrial complex” and “a growing public misconception that mandatory sentences for drug offenders needed to be reduced.”
So are the stars aligned differently in this Congress? Marc Levin ot the Texas Public Policy Institute told a session on the future of sentencing reform that “part of the strategy is to have as comprehensive a [sentencing reform] package as possible, without making perfect the enemy of the good.” Both left- and right-wing politicians are working on sentencing reform, and Koch Industries general counsel Mark Holden thinks that Attorney General Sessions will not be an impediment to the bill’s passage, despite what Levin called Sessions’ “real difference of opinion” on sentencing reform.
One potential stumbling block may be the Mens Rea Reform Act(S.1902). That Act would add a default rule for juries, requiring them to find criminal intent for federal offenses that don’t explicitly have an intent standard. If enacted, the Act would specify a default state of mind of “willfully,” and would require that unless the statute specified otherwise, AUSAs would have to prove the state of mind for every element of the offense. For example, a felon-in-possession charge under 18 USC 922(g) (which does not specify a state of mind) would require proof that the defendant possessed a gun that had traveled in interstate commerce intending to break the law. Currently, the government only must show the defendant knew he or she possessed a gun, not that the gun had traveled interstate and not that he or she knew the law prohibited possession.
Conservatives and criminal-defense organizations argue the measure is a necessary part of the congressional effort to reform sentencing and incarceration. Some Senate Democrats, however, fear the measure is far too sweeping and could be a back-door attack on federal regulations that police corporate behavior.
Senator Sheldon Whitehouse (D – Rhode Island), a member of the Judiciary Committee, told the Atlantic magazine last week that he wouldn’t support a sentencing reform bill containing the change in mens rea proposed by the MRRA. “It would turn me into a warrior against it,” he said. Chuck Schumer (New York), the Democratic leader in the Senate, also was quoted as saying he would oppose such a bill.
Ohio State University law professor and sentencing expert Douglas Berman wrote pessimistically last Friday about the effect the MRRA could have on sentencing reform:
I have said before and will say again that this kind of opposition to a reform designed to safeguard a fundamental part of a fair and effective federal criminal justice system shows just how we got to a world with mass incarceration and mass supervision and mass collateral consequences. Nobody seems willing or able to understand that making life easier for prosecutors anywhere serves to increase the size and reach and punitiveness of our criminal justice systems everywhere. In turn, if you want a less extreme and severe criminal justice system anywhere, the best way to advance the cause is by seeking and advocating to limit government prosecutorial powers everywhere.
We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.
HISTORY REPEATS ITSELF
Two bills looking to reshape the nation’s criminal justice system were introduced this week, and all of sudden, criminal justice advocates are partying like it’s 2015.
Leading the pack, a pack of influential senators led by Chuck Grassley (R-Iowa) and Dick Durbin (D-Illinois) announced the introduction of S. 1917, the Sentence Reform and Corrections Act of 2017. SRCA17 – a retread of the Sentence Reform and Corrections Act of 2015 – is aimed at easing sentences for some federal offenders, such as for drug crimes, while beefing up other tough-on-crime laws. The measure would get rid of the federal three-strike law mandatory life sentence for some repeat drug offenders, three-strike but would also allow some people with previous convictions for serious violent and serious drug felonies to face enhanced penalties.
“This bill strikes the right balance of improving public safety and ensuring fairness in the criminal justice system,” said Grassley, who is chair of the Senate Judiciary Committee. “It is the product of much thoughtful deliberation, and we will continue to welcome input from stakeholders as we move forward.”
SRCA17reportedly reduces the enhanced penalties that apply to repeat drug offenders and eliminates the three-strike mandatory life provisions for some offenders; expands the existing safety valve to offenders with more extensive criminal histories, and creates a second safety valve that gives judges discretion to sentence certain low-level offenders below the 10-year mandatory minimum; expands the reach of the enhanced mandatory minimum for violent firearm offenders to those with prior federal or state firearm offenses but reduces that mandatory minimum to provide courts with greater flexibility in sentencing; requires the Dept of Justice to conduct risk assessments to classify all federal inmates and to use the results to assign inmates to appropriate recidivism reduction programs, including work and education programs, drug rehabilitation, job training, and faith-based programs, permitting prisoners who successfully complete these programs to get early release and to spend up to 25% of their remaining sentence in home confinement or a halfway house; and provides for a report and inventory of all federal criminal offenses.
Sen. Grassley has not revealed his scheduling plan for marking up SRCA17. Its 2015 predecessor passed the Judiciary Committee 15-5 during the last Congress, but never reached a floor vote due to Senate Majority Leader Mitch McConnell (R-Kentucky), who did not want the measure voted on during the contentious 2016 presidential campaign.
A bipartisan coalition of legislators supports SRCA17, including Senator Mike Lee (R-Utah), Lindsey Graham and Tim Scott (both R-South Carolina), Jeff Flake (R-Arizona), Roy Blunt (R-Missouri), Dianne Feinstein (D-California), Sheldon Whitehouse (D-Rhode Island), Patrick Leahy (D-Vermont) and Cory Booker (D-New Jersey).
The Attorney General, whom President Trump says is “an idiot,” will likely oppose SRCA17.
SRCA17 will enjoy support from White House senior advisor Jared Kushner, who is interested in reforming the federal criminal justice system and previously has met with senators about the issue. The bill will undoubtedly be opposed by Attorney General Jefferson Beauregard Sessions III, a man recently described by President Trump as an idiot, who helped kill SRCA15 when he was a senator.
Meanwhile, five Republican senators Ted Cruz (Texas), Orrin Hatch and Mike Lee (both of Utah), Rand Paul (Kentucky), David Perdue (Georgia) introduced S. 1902, the Mens Rea Reform Act, on Monday. The MRRA would prevent the government from convicting someone of a federal crime without proving they committed the crime “knowingly and willfully.”
This is the second time Republicans in Congress have introduced “mens rea” reform, presenting a similar bill in 2015 that never made it out of committee.
We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.
SWEEPING UP
Ron White was a “person of interest” to Kansas City law enforcement, a term that makes one sound better than it intends. We think more of a Taylor Swift or a Tom Brady, or even Ivanka Trump, when we hear “person of interest.” But not the KCPD. Law enforcement thought Ron was interesting because they suspected he was involved in a series of violent crimes.
In pursuit of their interest, officers searched Ron’s parents’ home. They found a black duffel bag in the bedroom Ron had used as a kid and still slept in from time to time. Among the swag in the bag was a stolen Romarm Draco handgun and a Cobray Street Sweeper.
The Draco is not a weapon for carefree Saturday afternoons plinking at cans. The Street Sweeper even less so. Described by firearms expert Ian McCollum as a “pretty miserable shotgun,” the Sweeper is an American knockoff of a 1980s South African design, a 12-gauge shotgun with a drum magazine capable of holding a dozen rounds. Think “shotgun revolver.”
The Street Sweeper may be poorly made and a beast to shoot, but it has great curb appeal. Having played a supporting role in Miami Vice, several of the Robocop movies, and several video games, it’s not surprising that the gun was not seen so much at skeet shooting events as it was at drug deals gone bad. Thus it was that in 1994, the Bureau of Alcohol, Tobacco, Firearms and Explosives classified the Sweeper as a “destructive device” under 26 USC 5845(f). A “destructive device” – in this case “any type of weapon… the barrel or barrels of which have a bore of more than one-half inch in diameter, except a shotgun or shotgun shell which the Secretary finds is generally recognized as particularly suitable for sporting purposes” – may not lawfully be possessed unless registered. (The Street Sweeper, being a 12-gauge shotgun, has a bore diameter of .729 inches.) The Secretary (of the Treasury, in this case), who was not much of a dove hunter, decided the Sweeper has no sporting purpose, and put it on the DD list.
That caused a problem for Ron, whose Street Sweeper unsurprisingly was not registered. Ron was convicted of possession of a stolen gun (the ugly little Draco) and an unregistered destructive device.
A three-judge panel at the 8th Circuit reversed the stolen-gun count, but upheld the conviction on the destructive device and Ron’s 57-month sentence. Earlier this week, on rehearing, ten 8th Circuit judges sitting en banc agreed that the stolen-gun charge was properly reversed. In addition, the Court threw out the destructive device count.
The same year the Street Sweeper became a destructive device, the Supreme Court – concerned that there were so many “look-alike” but lawful guns in circulation – held in Staples v. United States that a district court must instruct the jury that knowledge of the characteristics bringing a firearm or destructive device under the coverage of the National Firearms Act is a necessary element of the offense of possession of an unregistered firearm. In other words, if a shooting enthusiast has an AR-15 – the legal, semi-automatic version of the fully automatic M-16 – but it has been modified to fire like an M-16, the government has to prove the owner knew that.
It’s simply mens rea, the Court said, the “rule of, rather than the exception to, the principles of Anglo-American criminal jurisprudence… Congress need not expressly announce a mens reain a criminal statute in order for the Supreme Court to predicate conviction under that statute on proof of knowledge or intent.” That’s what Staples held, except that after Staples, the 8th Circuit in United States v. Barr slapped a big asterisk on Staples, holding that where “the characteristics of the weapon itself render it ‘quasi-suspect,’ Staples does not require proof that the defendant knew of the specific characteristics which make the weapon subject to the Act,” but instead the “government need only prove that the defendant possessed the ‘quasi-suspect’ weapon and observed its characteristics.”
It might be called the “Captain Obvious” exception. If the destructive device is obviously a destructive device, the government does not have to prove the defendant knew it was a destructive device.
The en banc Court concluded that the Circuit’s Barr decision was inconsistent with Staples and mens rea. It complained that “Barrplaced gun owners in the precarious position of facing strict criminal liability for possessing a firearm merely because a panel of judges may later classify that firearm as part of an arbitrary subcategory of weapons.”
In this case, Barr let the earlier classify the Street Sweeper as “quasi-suspect” for “reasons completely unrelated to the reason Congress chose to regulate the gun.” The gun was regulated because it had a bore of more than one-half inch and was found by a bureaucrat to not be “particularly suitable for sporting purposes.” But the three-judge panel said the Street Sweeper was quasi-suspect because it “a short-barreled twelve-gauge shotgun with a twelve-round drum feed… with the appearance of a large machine gun” and it “does not have the appearance of a traditionally lawful weapon.”
The en banc Court concluded that “Barr’s holding as to the mens rearequired for a conviction under the National Firearms Act is wholly inconsistent with Staples and is therefore overruled. By imposing strict criminal liability on owners of “quasi-suspect” guns — an undefined category that invites arbitrary application — Barr contravenes the Supreme Court’s view that Congress did not intend to make outlaws of gun owners who were wholly ignorant of the offending characteristics of their weapons.”
We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.
JACKASS
Remember back in 2000 when MTV decided to break Masterpiece Theatre’s hammerlock on classy television programming? The result was Jackass, an ill-conceived piece of televised mayhem in which the show’s participants performed all manner of risky and stupid stunts on themselves and each other. Their viewers – being not just kids but dumb kids – often imitated what they saw on the show.
Much of what the ensemble cast did to each other – such as branding one participant on his bare kiester with a hot iron – easily blew past negligence and gross negligence standards on the way to sheer recklessness. And that brings us to today’s case.
George Bennett was convicted of being a felon in possession of as gun under 18 USC 922(g), among other crimes. Because the sentencing court concluded that George had three prior “crimes of violence” within the meaning of the Armed Career Criminal Act, he was sentenced under 18 USC 924(e) to 25 years. Without the ACCA specification, the most he could have gotten for the 922(g) was 10 years.
The legal landscape began shifting with the Supreme Court’s decision in Johnson v. United States that a portion of the ACCA – the “residual clause,” which pretty much defined a violent crime as one in which something bad could have happened, intended or not – was unconstitutionally vague. After Johnson, George filed a motion under 28 USC 2255 for relief from the ACCA sentence, arguing that his priors, all of which were aggravated assault under Maine law, were not “crimes of violence” within the meaning of the ACCA.
An ACCA “crime of violence” is an offense that (1) was burglary, arson, extortion or use of explosives (called the “Enumerated Clause”); or (2) has as an element the use, attempted use, or threatened use of physical force against the person of another (called the “Force Clause”).
George argued in his 2255 motion that Maine’s aggravated assault statute went beyond the Force Clause, in that one could commit aggravated assault through reckless conduct but without intent. The district court agreed with George, but the government appealed.
Cast member gets branded.
On Wednesday, the 1st Circuit Court of Appeals upheld the district court, not necessarily agreeing with George that recklessness was not enough to come within the Force Clause, but not being sure that it did not. In a 54-page exposition of the state of the law on recklessness and the Force Clause, the Circuit concluded that “the text and purpose of ACCA leave us with a ‘grievous ambiguity,’ as to whether ACCA‘s definition of a “violent felony” encompasses aggravated assault in Maine, insofar as that offense may be committed with a mens rea of mere recklessness, as opposed to purpose or knowledge, we… must apply the rule of lenity… and, in consequence, we conclude that Bennett’s two prior Maine convictions for aggravated assault do not so qualify…”
Maine defines aggravated assault to include “intentionally, knowingly or recklessly causing” bodily injury to another. Maine defines the mens rea of recklessness as acting when a person “consciously disregards a risk.”
The problem, the Court said, is that “Congress chose in ACCA to denominate ‘the use of force against another’ as a single, undifferentiated element.” The question thus becomes whether “the relevant volitional act that an offense must have as an element for ACCA purposes is not just the ‘use . . . of physical force,’ but the ‘use . . . of physical force against the person of another.” The injury caused to another by the volitional action in a reckless assault, the Court said, is by definition neither the perpetrator’s object nor a result known to the perpetrator to be practically certain to occur. For that reason, a voluntary reckless act – the Court used the example of throwing a plate against a wall in anger, resulting the splinters flying off and injuring one’s spouse. – may endanger another without deliberately endangering another.
The Court could as easily have used the Jackass “branding iron” skit.
The Court traced all of the arguments for and against George’s position, but concluded that “the canon against surplusage does at least suggest that the follow-on ‘against’ phrase in ACCA must be conveying something that the phrase ‘use . . . of physical force’ does not… Nevertheless, we can hardly be sure.”
The Rule of Lenity holds that a court should interpret any ambiguity in a criminal statute in the defendant’s favor. The Circuit said, “We are considering here a sentencing enhancement of great consequence. We should have confidence, therefore, that we are doing Congress’s will in applying this enhancement here.”
The Bennett decision is long but consequential, treating in detail a substantial question on interpreting “use of physical force against the person of another.” The issue may well be the next battleground in ACCA and “crime of violence” litigation.
We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.
BURY YOUR HEAD IN A COCKTAIL NAPKIN
A 1st Circuit insider-trading decision last Friday provided some head-shaking at the way the defendants passed the stock tip between themselves, and an interesting consideration of the “ostrich instruction.”
Bob Bray was a contractor and real estate developer (think “Bob the Builder”). He was also an avid golfer, and became drinking and dining buddies with John O’Neill, a bank mergers-and-acquisitions executive. Over the years, they tipped back a lot of cold ones and ate plenty of burgers. Bob became a family friend, and helped John’s son land a few summer jobs.
From time to time, Bob would ask John for stock tips, and John would suggest certain bank stocks, based on public information. No problem there. But one day in 2010, Bob told John he needed a big financial score so he could afford a large real estate project.
John replied that he knew of several good bank investments, but while he talked, he wrote the word “Wainwright” on a cocktail napkin and slid it across the table. John knew from work that Wainwright was a takeover target, and he had been tasked to do “due diligence” on the acquisition. He also knew that the information was confidential, and that he was duty-bound to keep it that way.
Bob the Builder sold everything he had, and as quickly as he could, bought thousands of shares of Wainwright Bank, a local institution. Sure enough, a few weeks later, a big bank announced it was gobbling up little Wainwright, and Bob doubled his money.
Bob was a “go big or go home” kind of guy, which means that his purchase of all of that stock left a really big blip in the trading history. Pretty soon, private regulators started asking questions, then the SEC, and finally the U.S. Attorney.
Bob and John were convicted of insider trading. Last week, the 1st Circuit upheld the conviction.
Much of the appellate decision discusses issues which are interesting enough, but not what we’re writing about here. We want to focus on Bob’s complaint that the district court gave the jury a flawed “conscious avoidance” instruction.
The doctrine of “conscious avoidance” (also called “willful blindness”) is a judge-made doctrine that expands the definition of knowledge to a case where a defendant is found to have willfully closed his eyes to the high probability a fact exists. While the doctrine originated in the context of drug trafficking cases, it has since been expanded to a wide array of prosecutions and is increasingly used in the white-collar cases.
The jury instruction – often called the “ostrich instruction” because the defendant has figuratively buried his head in the sand, benefits the government. It’s an instruction that often is requested where the government’s evidence of actual knowledge is pretty slim. Defense attorneys complain (with some justification) that “the instruction invites the jury to convict based on evidence of mere negligence or recklessness.”
One of the issues in Bob’s case was whether he knew that John had a duty to keep the Wainwright information confidential. Bob argued on appeal that he should get a new trial because the district court wrongly instructed the jury on the mens rea element of his offense. The district court erroneously told the jury that it could convict Bob of securities fraud so long as it found that he “knew or . . . should have known” that O’Neill had breached a duty of confidentiality by giving him the Wainwright tip. Bray also complained that the district court’s instructions erred by equating the concept of “willful blindness” with negligence.
The 1st Circuit agreed that “the district court clearly erred in defining the ‘willful blindness’ standard.” Willful blindness has “an appropriately limited scope that surpasses recklessness and negligence,” the Circuit said, “and expressly contrasting willful blindness with ‘a negligent defendant… who should have known of a similar risk but, in fact, did not” was wrong. The Court held:
A willful blindness instruction is meant to inform jurors that they may impose criminal liability on people who, recognizing the likelihood of wrongdoing, nonetheless consciously refuse to take basic investigatory steps. The instruction in this case, however, mistakenly suggested that the jury could find “consciously and deliberately avoided learning” about the violation.
Unfortunately for Bob, his attorney did not object to the instruction at trial, so the review on appeal was under the FRCrimP 52(b) “plain error” standard. The fourth prong of “plain error” is whether the mistake “distort[ed] the fairness or integrity of lower court proceedings in some extreme way.” Here, the Court said, it did not, because the evidence was ample that Bob knew the moment the napkin was wordlessly slid across the table that he was getting inside information that John had no right to provide. In the law business, that’s called “actual knowledge.”
Bob scored over $300,000 on the sale of his Wainwright stock. And then, he lost big.
The felon-in-possession statute, 18 USC 922(g)(1), makes it illegal for a convicted felon to possess a gun or ammo. But the statute does not specify a punishment. Instead, 18 USC 924(a)(2) provides the 10-year maximum for anyone who knowingly violates the F-I-P statute.
Certiorari was also granted in a case asking whether generic burglary requires proof that a defendant intended to commit a crime at the time of unlawful entry or whether it is enough that the defendant formed the intent to commit a crime while “remaining in” the building or structure. Two circuits hold the defendant has to intend to commit a crime as he or she enters. Four hold that it’s burglary even if a defendant can enter the structure with a pure heart, and only later decides to commit a crime.
