Federal Criminal Sentences in Limbo

The Federal criminal sentencing process is in turmoil. It’s all because of a U. S. Supreme Court decision issued in June, Blakely vs. Washington. It now appears all-but-certain that the Federal sentencing guidelines, which are nearly twenty years old, are unconstitutional.

Here’s the background:

Until 1984, Federal judges had wide discretion to decide punishments. There were some Federal crimes for which the sentencing range was anything from probation to life in prison. Crimes with ranges of zero to ten or zero to twenty were quite common. Naturally, there was significant disparity between sentences. Defendants who committed seemingly identical crimes were received vastly different punishments, depending on which judge they were lucky (or unlucky) enough to get.

The pre-1984 scheme also allowed for parole. So, if a defendant was sentenced to ten years in prison, a parole officer would later recommend how much time he really served, based on his behavior in prison and a guess about his state of rehabilitation. In a way, it was really the parole officer, not the judge, who eventually decided the length of the sentence.

For many years, Congress had wrestled with revising the criminal code to provide for more determinate sentences. Ultimately, the task proved too daunting, and Congress instead passed the Sentencing Reform Act of 1984 (“SRA”). The SRA punted the responsibility for reforming Federal sentencing to a newly minted Sentencing Commission. The Commission was tasked with designing prescriptive guidelines that would leave the judge very little room for discretion. The Act also abolished parole, although it did allow time off for good behavior. Nevertheless, under the Act, defendants were assured of serving at least 85% of their sentences.

The Sentencing Commission’s guidelines are a mind-boggling collection of formulas that run longer than a small town telephone directory. Based on myriad characteristics of the offense and the offender, the judge is given a narrow “guideline range” in which to sentence the defendant. A typical guideline range is something like 120 to 150 months (10 to 12 1/2 years) in prison. The judge can depart from this range if there are mitigating or aggravating factors in the case that the guidelines didn’t cover. Given the level of detail embedded in the guidelines calculation, this rarely happens.

Some people argued at the time that Congress had exceeded its authority in enacting the SRA. The argument was that only Congress can pass laws deciding what the punishment will be for specific crimes — it can’t delegate this authority to an unelected Commission. However, the Supreme Court ruled 8-1 that the SRA was a constitutionally permissible delegation of legislative power. Justice Scalia dissented, calling the Commission a “junior-varsity Congress.”

Applying the guidelines is no easy task. I recently highlighted the peculiar fate of Jamie Olis, who was convicted of accounting fraud at the energy firm Dynegy. For the fraud itself, Olis’s sentence would have been about 1-2 years. But the guidelines called for an “enhancement” based on the amount of money investors had lost because of the fraud. The probation office argued that Olis was entirely responsible for the $100 million that a California retirement plan had lost on Dynegy stock over 2001-2002 — ignoring other factors that had battered the market that year (the 9/11 attacks; the broad collapse of energy stocks generally; the Enron scandal; Dynegy’s failed bid for Enron; and so forth). Crediting Olis with a $100 million loss increased his sentence to a range of 24-30 years. Accepting the probation office’s recital of the facts, the judge then sentenced Olis to 24 years in prison, the bottom end of the permitted range.

We should pause to emphasize that, while the judge in Olis’s case had no discretion to depart from the guideline range, he had absolute discretion to determine the amount of the fraud, which in turned determined the applicable guideline. Unfortunately, many Federal judges these days do as Olis’s judge did: they accept the probation office’s assumed facts, even when those facts are vigorously disputed by the defendant and were never found by a jury.

For several years, the Supreme Court has been wrestling with modern sentencing regimes that expose a defendant to long prison terms, based on the judge determining the existence of various “sentencing factors.” The burden of proof for a sentencing factor is usually a lot lower than the burden of proof for guilt. In the Federal system, sentencing factors need only be demonstrated by a “preponderance of the evidence.” As the Jamie Olis case shows, sometimes judges give short shrift even to that low standard.

The Federal sentencing regime was thrown into disarray in June, when the Supreme Court decided a case called Blakely vs. Washington. Ralph Blakely had pleaded guilty to kidnapping his estranged wife. Washington state law called for a sentence of 49 to 53 months. However, Washington’s criminal code calls for an enhanced sentence in cases where the defendant acted with “deliberate cruelty.” Finding that Blakely had done so, the judge sentenced him to 90 months in prison. The Supreme Court reversed, because Blakely’s sentence depended on an extra finding of fact (deliberate cruelty) that the defendant had not admitted. The Court said that any fact increasing the minimum sentence must either be admitted by the defendant or found beyond a reasonable doubt by a jury.

The critical point is that Washington’s sentencing system is virtually indistinguishable from the Federal system created by the Sentencing Reform Act of 1984. In Blakely, the Court wrote in a footnote, “The Federal Guidelines are not before us, and we express no opinion on them.” However, this is typical of the Supreme Court, which seldom rules on more than is necessary to decide the case before it. Anyone could see that, by the logic employed in Blakely, the Federal guidelines could not survive intact.

Sure enough, within weeks, several Federal Courts of Appeals had ruled the Federal guidelines unconstitutional, by the same rationale the Court had employed in Blakely. An even larger number of trial courts had done so. Several of these cases are already on the Supreme Court’s doorstep, with motions urging the Court to expedite consideration. It seems virtually certain that the Court will agree to do so.

Predicting how the Supreme Court will rule is always tricky, but almost no one expects the Court to find the Federal guidelines entirely Constitutional. The system is just too similar to the one the Court tossed out in Blakely. The more difficult question is what to do about it — which lawyers refer to as the “severability issue.” In short: are the guidelines that pass constitutional muster “severable” from those that do not?

The problem is that Congress clearly intended the guidelines to be used in all Federal criminal cases. What kind of strange system would we have, if they applied in some cases, but not in others? On the other hand, if the Supreme Court tosses out the entire Sentencing Reform Act, federal sentencing would return to the indeterminate scheme as it existed in 1984. Yet, that scheme assumed the existence of parole, which is no longer available under Federal law. So it is indeed a quagmire.

Blakely, like so many cases at the Supreme Court these days, was decided by a 5-4 margin. However, the division was not the Court’s usual conservative-liberal split. Instead, the two most conservative Justices, Scalia and Thomas, were joined by three of the most liberal, Stevens, Souter, and Ginsburg. Justice O’Connor, who is seldom on the losing side of a case, said of the case that, “It looks like a No. 10 earthquake to me.” And in a rare public show of frustration for a Justice, she said she was “disgusted in how we dealt with it.”

A wide range of judges and legal experts consider the twenty-year-old Federal guidelines a noble failure. They are too inflexible, too draconian, and too unfair. The current Congress, however, has done nothing to fix them. A Supreme Court ruling applying Blakely case to the Federal system would force Congress to try again.