The dust is settling on the U.S. Supreme Court’s decision yesterday in United States v. Booker and United States v. Fanfan that the federal sentencing guidelines are unconstitutional because they violate a defendant’s Sixth Amendment right to be tried by a jury.
Congress enacted the guidelines almost 20 years ago on the theory that the guidelines would standardize prison sentences and make them fairer nationwide. However, the law of unintended consequences took over. As demagogues began advocating long prison sentences, the guidelines evolved largely into an arbitrary and capricious mess that unwisely restricts judicial discretion in sentencing, leading to absurd sentences in cases such as in the sad case of Jamie Olis. The SCOTUS decisions, set forth in two 5-4 rulings, gives broader discretion back to federal judges by relegating the guidelines to advisory in nature.
Despite the demagogic posturing “to be hard on crime” that inevitably follows such a Supreme Court ruling, the decision is the right one. Earlier this year, the American Bar Association’s Justice Kennedy Commission, a distinguished panel of legal scholars and jurists, recommended repealing the mandatory sentences and restoring guided discretion for judges in sentencing, which allows judges to consider the unique characteristics of offenses and offenders that warrant increased or decreased prison time.
Moreover, apart from the troubling moral issues relating to capricious sentencing, such sentencing has also caused practical problems. The harsh sentences that were being meted out under the guidelines has caused big problems in the federal prison system where, according to the Bureau of Prisons, more than half of the 180,000-plus people in federal institutions are there for drug law violations. Most are small-time and nonviolent offenders who are serving long sentences pursuant to the myopic guidelines. Annual federal incarceration costs are estimated at $26,696 per inmate, which translates to about $4 billion annually.
The Supreme Court previewed yesterday’s ruling last year by striking down in Blakely v. Washington the State of Washington’s sentencing guidelines that were similar to the federal guidelines. Both sets of guidelines directed judges to boost sentences based on exacerbating factors such as the defendant playing a leadership role in a crime, acting with deliberate cruelty, or the infamous “market effect” of the crime. The standard for deciding whether to include these “enhancements” under the guidelines was merely a preponderance of the evidence as determined by the judge, rather than the “beyond a reasonable doubt” standard that juries are required to use in convicting a defendant. Yesterday’s ruling held that that mandating such enhancements violated the constitutional right of defendants to a trial by jury.
Unfortunately, the Supreme Court majority that decided that issue could not reach a consensus on whether the guidelines should be overturned entirely or simply rendered advisory in nature. So, a new five-justice majority in a second opinion held that the guidelines should stay almost entirely intact, except for a few provisions that made them mandatory. The second decision also gives federal appeals courts specific guidance on reviewing disputed sentences. The key determinant is the “reasonableness” of the original sentence, although it’s far from clear how district courts will interpret that concept in the sentencing context.
Although yesterday’s decisions are helpful to federal defendants whose sentences are currently under review, the decisions will not result in an onslaught of appeals relating to past sentences meted out under the guidelines. The Supreme Court dashed those hopes by making clear that its decision will not apply retroactively to sentencing decisions that had reached final resolution. Of the estimated 180,000 federal prisoners, only several thousand have cases on direct review, which means that most federal prisoners will not be able to seek a shorter sentence, at least for time being. Moreover, the vast majority of federal sentences are doled out under plea bargains in which the defendant is required by the plea agreement to waive the right to challenge the sentence.
As noted in yesterday’s post, Professor Berman’s blog is the best place to review more thorough analysis of the implications of these decisions. Take a look there over the next few days as he and other sentencing guideline experts provide their views on the implications of these decisions.

The Supreme Court ruled today in this decision in U.S. v. Booker that the federal sentencing guidelines must satisfy the standards of the Sixth Amendment as applied in the Court’s earlier ruling in Blakely v. Washington. Accordingly, the Supreme Court has set aside two provisions of the guidelines that made them mandatory.
Here is the initial NY Times article on the Supreme Court’s decision, but for more thorough analysis of the decision, check out Professor Berman’s blog.

In a highly unusual development, a federal magistrate in Ohio is recommending that a U.S. District Court approve a default judgment in an accounting fraud case against Big Four accounting firm PricewaterhouseCoopers for its alleged failure to turn over evidence sought by a former audit client and its shareholders.

In this article, NY Times business columnist Floyd Norris notes the common defense that the various indicted CEO’s of the business world are using these days to defend themselves against criminal charges — i.e., that the executive was “honestly ignorant” of the wrongdoing that was occurring at his company and that any false statements that he made were the unintentional result of his subordinates misleading him.
Or, as it is sometimes referred to in hard-knuckled legal circles, the “honest idiot defense.”
The honest idiot defense does not attempt to deny that misconduct occurred. Rather, the defense focuses on avoiding liability by contending that the defendant’s good faith ignorance prevents the government from establishing the requisite mens rea (intent) to convict the defendant of a crime. As you might expect, honest ignorance is not the easiest thing to get a jury to believe in defending a high-powered business executive.
Nevertheless, as this Wall Street Journal ($) article reports, the honest idiot defense is going to be front and center in the upcoming criminal trial of former Worldcom CEO, Bernard Ebbers. The Ebbers criminal case has many fascinating aspects, not the least of which is the yin-yang relationship between Mr. Ebbers and the government’s chief accuser against him, former WorldCom CFO Scott Sullivan. But the most interesting aspect of the case surely will be the way in which Mr. Ebbers “good ol’ boy” persona plays with the jury in the presentation of the honest idiot defense. And make no mistake about it, Mr. Ebbers will portray himself as the good-hearted dunce (he used his background as a gym teacher and motivator to apply high school basketball coaching techniques to management issues at WorldCom) in comparison to the sophisticated and well-educated Mr. Sullivan.
Another interesting aspect of the Ebbers criminal trial is that the government does not have the typical paper trail of fraud that it has used in most recent business fraud cases, notably the Arthur Andersen prosecution. Turns out that “country boy” Mr. Ebbers did not like computers and so he eschewed using e-mail to communicate with others at WorldCom. Moreover, iansmuch as Mr. Ebbers did not enjoy either reviewing or preparing written materials, he communicated orally with subordinates almost entirely. He did not even use voice-mail. Consequently, without the usual paper trail, the case may well come down to a swearing match between Messrs. Ebbers and Sullivan, which will also be impacted on how well Mr. Ebbers can present himself to the jury as a lovable dunce who the WorldCom sharpies manipulated.
Finally, it will be interesting to see if the Ebbers defense team raises the fact that Mr. Ebbers did not voluntarily sell much, if any, of his WorldCom stock after the bubble burst in the telecommunications industry in 1999. Ebbers’ defense lawyers may reason with the jury that, if Mr. Ebbers really masterminded an elaborate fraud at WorldCom, then why did he not sell his WorldCom stock before the stock price collapsed? Rather than getting out rich (by way of comparison, Mr. Sullivan dumped almost $30 million of WorldCom stock in 2000), Mr. Ebbers went from being a billionaire to being so deeply in debt that personal bankruptcy appears inevitable. When the price of WorldCom stock began to plummet, margin calls forced Mr. Ebbers to sell one big slug of stock, but then he persuaded WorldCom’s compliant board to stave off further margin calls by having WorldCom guarantee his loans that were secured with WorldCom stock. The financial result of those transactions is that the now insolvent Mr. Ebbers owes WorldCom more than $300 million, but savvy defense attorneys may be able to present the scenario to the jury as further evidence that Mr. Ebbers really thought that WorldCom would rebound and simply did not understand the dire financial condition.
Despite the obvious differences between the two men, that’s why former Enron chairman and CEO Kenneth Lay and his attorneys will be watching the Ebbers criminal trial very closely.