Opposition Brief — Custable v. United States

vee | Supreme Court, U.S.

\

No. 10-631 MAR 4- 2011

In the Supreme Court of the United States"

FRANK CUSTABLE, JR., PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

NEAL KUMAR KATYAL

Acting Solicitor General

Counsel of Record

LANNY A, BREUER

Assistant Attorney General

Scott A.C. MEISLER

Attorney

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTIONS PRESENTED

1. Whether the district court violated the Ex Post

Facto Clause of the Constitution by applying the version

of the advisory Sentencing Guidelines in effect at the

time of sentencing.

2. Whether, under plain-error review, petitioner is

entitled to relief based on his claim that the one-book

rule in Sentencing Guidelines § 1B1.11(b)(3), which re-

quires that the revised edition of the Sentencing Guide-

lines be used to calculate the advisory sentencing range

when the defendant’s offenses occurred both before and

after the revised Guidelines took effect, violates the Ex

Post Facto Clause.

(1)

TABLE OF CONTENTS

Page

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EE LE CRT TEEPE EE TEE CRT PIT Ore Or ey es. 9

NS cei higw cg ee pny a taeda GAELS ee 20

TABLE OF AUTHORITIES

Cases:

Castillo-E'stevez v. United States, 1381 S. Ct. 457

eo sas ck doe Oe LER Ee eee 20

Cutter v. Wilkinson, 544 U.S. 709 (2005) .............. 18

Fowler v. United States, 1380S. Ct. 2371 (2010) ......... 14

Gall v. United States, 552 U.S. 38 (2007) .............. 12

Hensley v. United States, 130 S. Ct. 1284 (2010) ........ 10

Irizarry v. United States, 553 U.S. 708 (2008) .......... 12

Kimbrough v. United States, 552 U.S. 85 (2007) ..... 12,13

Miller v. Florida, 482 U.S. 423 (1987) .............. 10, 11

Pepper v. United States, No. 09-6822 (Mar. 2,2011)..... 12

Rita v. United States, 551 U.S. 338 (2007) ............. 12

Spears v. United States, 129 S. Ct. 840 (2009) ......... 12

United States v. Bailey, 123 F.3d 1381 (11th Cir.

| CASA I Aer eat ict enh aA PURE Aye Rng Ae 19

United States v. Bertoli, 40 F.3d 1384 (3d Cir. 1994),

ert. dewied, 617 U.S A157 (IGG) «csc civic i vecaves 20

United States v. Booker, 543 U.S. 220 (2005) ........... 11

United States v. Castillo-Estevez, 597 F.3d 238

(5th Cir.), cert. denied, 131 S. Ct. 457 (2010) ......... 20

(IIT)

IV

Cases—Continued: Page

United States v. Cooper, 35 F.3d 1248 (8th Cir. 1994),

vacated, 514 U.S. 1094 (1995), reinstated, 63 F.3d

RT nee na OT na Oa 19

United States v. Deegan, 605 F.3d 625 (8th Cir. 2010) ... 13

United States v. Demaree, 459 F.3d 791 (7th Cir.

2006), cert. denied, 551 U.S. 1167 (2007) ...... 4,8, 9,12

United States v. Duane, 533 F.3d 441 (6th Cir. 2008) .... 19

United States v. Fowler, 342 Fed. Appx. 520 (11th Cir.

2009), cert. denied, 130 S. Ct. 2371 (2010) ........... 13

United States v. Kimler, 167 F.3d 889 (5th Cir. 1999) .. 19

United States v. Kumar, 617 F.3d 612 (2d Cir. 2010),

petition for cert. pending, No. 10-961 (filed Jan. 24,

ee eC ure te ar Cea eee i ks 19

United States v. Lanham, 617 F.3d 873 (6th Cir.

eG Pog eae Ue ene Goa ke Pa Oe a wa 13

United States v. Lewis, 235 F.3d 215 (4th Cir. 2000),

cert. denied, 534 U.S. 814 (2001) ................... 19

United States v. Lewis, 606 F.3d 193 (4th Cir. 2010) .... 13

United States v. Marban-Calderon, No. 09-40207,

2011 WL 135040 (5th Cir. Jan. 18, 2011) ............ 13

United States v. Marcus, 130 S. Ct. 2159 (2010) ........ 19

United States v. Ortiz, 621 F.3d 82 (2d Cir. 2010), pe-

tition for cert. pending, No. 10-7719 (filed Nov. 24,

SE acc ae Pas cca aaa) kaos Ca duee kere e ena 13

United States v. Ortland, 109 F.3d 539 (9th Cir.),

cert, cortem, GES U.S. GGi (IGG) onc ccc cc cecsciscs 19

United States v. Rodriguez, 630 F.3d 39 (2010) ......... 13

United States v. Seacott, 15 F.3d 1380 (7th Cir. 1994) ... 11

United States v. Sullivan, 255 F.3d 1256 (10th Cir.

2001), cert. denied, 534 U.S. 1166 (2002) ............ 19

Cases—Continued: Page

United States v. Teague, 443 F.3d 1310 (10th Cir.),

cert. denied, 549 U.S. 911 (2006) ................... 20

United States v. Turner, 548 F.3d 1094 (D.C. Cir.

DU Susi cha auee sek a ata Seae eu eee Rasch eeu aos 13

United States v. Vivit, 214 F.3d 908 (7th Cir.),

cert. denied, 531 U.S. 961 (2000) .................. 19

United States v. Williams, 504 U.S. 36 (1992) .......... 18

United States v. Williams, 469 F.3d 963 (11th Cir.

ee oe ee ee Nr One ee aes ow oe 20

United States v. Wood, 486 F.3d 781 (3d Cir.),

cert. denied, 552 U.S. 855 (2007) ...........0e ee eeee 13

Constitution, statutes, guidelines and rules:

U.S. Const. Art. I, § 9, ¢1. 3 (Ex Post Facto

Be gs eau 0s ek 4 se eee aS oa we eee passim

rr re err reer rs 1,4

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as ec a ca eee CeCe Cee eae eS ERE RE 3

gs a rr re 1,3

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EL oe ceca se pack Saurakad oka hak ae a 1,4

eR PPE TTT Te CE TEETER Tere Te eee 15

ee eae ars wa eK ie Coa es 11

United States Sentencing Guidelines:

(2001):

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VI

Guidelines and rules: Page

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Ch. 5, Pt. A (Sentencing Table) ................. 15

(2002):

fF R! 6 rer rr rer ee 17

Bere rr ge a 17

(2008):

DBE 6 os ccvcessupuwepatanueabens eee 8

DC RRRSND base ccnevadovatessecresa ere 10

© RAMEE on 040 a0 eaceunetae eee 16

§ 1B1.11 comment. (hackg’d.) ...............006 17

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BEE ods bwcccaccdtesneuecsis eee 5

SD ads nen ccncece eee eee eee eee 9

BE 06k vixiass dete eee 8

App. C, amend. 647 (effective Jan. 25, 2003) .......... 4

App. C, amend. 653 (effective Nov. 1, 2003) .......... 4

VII

Rules—Continued:

Fed. R. Crim. P.:

ste tees

cite

Jn the Supreme Court of the United States

No. 10-631

FRANK CUSTABLE, JR., PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. 1-12)

is reported at 615 F.3d 824.

JURISDICTION

The judgment of the court of appeals was entered on

August 11, 2010. The petition for a writ of certiorari was

filed on November 9, 2010. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Following a guilty plea in the United States District

Court for the Northern District of Illinois, petitioner

was convicted of wire fraud, in violation of 18 U.S.C.

1348; securities fraud, in violation of 18 U.S.C. 77x; ob-

struction of justice, in violation of 18 U.S.C. 1503(a) and

1505; and criminal contempt of court, in violation of

18 U.S.C. 401(8). He was sentenced to 262 months of

(1)

2

imprisonment, to be followed by three years of super-

vised release. Pet. App. 16-19. The court of appeals

affirmed. Jd. at 1-12.

1. Between April 2001 and June 2002, petitioner or-

chestrated and executed a fraudulent scheme to acquire

stock in publicly traded companies that were experienc-

ing financial difficulties, stimulate the market for the

stock through misleading mass marketing, and sell the

stock at a profit. Petitioner used two fraudulent meth-

ods to acquire the stock. Under one of the methods, pe

titioner or an entity he controlled paid the companies

cash in exchange for which the companies issued shares

to individuals whom he designated. Petitioner caused

the companies to file Form S-8 registration statements

with the Securities and Exchange Commission (SEC)

that falsely represented that the designees were provid-

ing consulting services in exchange for the shares. Un-

der the other method, petitioner had the companies is-

sue unregistered shares to individuals, who then trans-

ferred the shares to petitioner or his designees. To cre-

ate the appearance that the shares were exempt from

registration under SEC Rule 144, petitioner had his at-

torneys prepare documentation falsely indicating that

the shares were issued to satisfy debts that had arisen

more than two years earlier. Pet. App. 29-39.

Once petitioner or his designees had acquired the

shares, petitioner had co-defendant Sara Wetzel deposit

them in brokerage accounts under her name and the

names of others. This arrangement allowed petitioner

to maintain control of the shares while avoiding SEC

reporting obligations that attach when an individual

holds significant percentages of a company’s stock. Pe-

Litioner also sought to stimulate the market’s interest in

the companies’ shares, which was low because the com-

panies were facing financial difficulties. To that end,

3

petitioner hired a colleye student, Jesse Boskoff, to send

out thousands of unsolicited e-mail messages containing

materially false and misleading information about the

companies. Petitioner then caused the stock to be sold

at artificially inflated prices. Pet. App. 39-43.

In early 2002, petitioner and his attorney, Robert

Luce, learned that the SEC had initiated an investiga-

tion into petitioner’s fraudulent scheme. Petitioner told

Luce that he was concerned that one of the individuals

who had participated in the scheme would cooperate

with the SEC. Luce stated that he would defuse the in-

vestigation by telling the SEC that he was that individ-

ual’s attorney and that the individual would assert his

Fifth Amendment right against self-incrimination if

questioned. Petitioner agreed to that plan knowing that

Luce was not the individual’s attorney. Pet. App. 43-44.

In March 2008, based on its investigation, the SiC

filed a civil securities-fraud suit against petitioner in the

Northern District of Illinois. On March 23, 2008, peti-

tioner was served with an asset-freeze order. The order

entered by a federal district judge, barred petitioner,

Wetzel, and a company petitioner controlled from trans-

ferring, concealing, or otherwise dissipating any prop

erty possessed by any of them. Three days later, peti

tioner withdrew $10,000 from the operating account of

his company, deposited the funds into an account he con-

trolled, and used the funds to pay personal expenses.

Petitioner also instructed Wetzel to withdraw funds

from company accounts that he knew to have been froz-

en by the court order. Pet. App. 44-45.

2. In April 2005, a grand jury in the Northern Dis-

trict of Illinois returned a 23-count indictment charging

petitioner, two of his companies, and eight co-defendants

with wire fraud, in violation of 18 U.S.C, 13438; mail

fraud, in violation of 18 U.S.C. 1341; securities fraud, in

4

violation of 15 U.S.C. 77x; obstruction of justice, in viola-

tion of 18 U.S.C. 1503(a) and 1505; and criminal con-

tempt of court, in violation of 18 U.S.C. 401(3). Pet. 6;

Pet. App. 2. In July 2008, petitioner pleaded guilty,

without a plea agreement, to 15 counts of wire fraud, two

counts of securities fraud, two counts of obstruction of

justice, and one count of criminal contempt of court.

Pet. App. 16-18, 29. Petitioner’s “Declaration in Support

of His Plea of Guilty” set forth the factual basis for the

charges and noted petitioner’s position that his sentence

should be calculated under the 2001 version of the

United States Sentencing Guidelines. /d. at 45-48.

3. a. The Presentence Investigation Report (PSR)

calculated petitioner’s recommended sentencing range

using the 2008 version of the Guidelines, the version in

effect at the time of petitioner’s sentencing. PSR 8 (cit-

ing United States v. Demaree, 459 F.3d 791 (7th Cir.

2006), cert. denied, 551 U.S. 1167 (2007)).' To caleulate

petitioner’s offense level, the PSR divided his convic-

tions into two groups, one containing the fraud and con-

tempt counts and the other containing the obstruction-

" The 2001 and 2008 Guidelines differ in only one respect relevant

to petitioner’s case. Although both versions prescribe a four-level en-

hancement for crimes involving 50 or more victims, Guidelines

§ 2B1.1(b)(2)(B), the 2008 Guidelines provide an additional two-level en-

hancement—a total enhancement of six levels—if the victims number

250 or more. Guidelines § 2B1.1(b)(2)(C). The Sentencing Commission

added the additional enhancement via an emergency amendment, effec-

tive January 25, 2003. See Guidelines App. C, amend. 647. Petitioner

notes (Pet. 4-5) that another amendment, effective November 1, 2003,

provides for an increase in the base offense levei for fraud offenses

from six to seven under specified circumstances. See Guidelines App.

C, amend. 653 (adding Guidelines § 2B1.1(a)(1)). That amendment is

not relevant to petitioner’s case, however, because his case does not

present the circumstances that trigger the one-level increase, as both

petitioner and the government explained in their court of appeals briefs.

See p. 8, infra.

5

of-justice counts. PSR 8. Because the fraud group pro-

duced “the highest offense level,” see Guidelines

§ 3D 1.3, the PSR used that group to determine the advi-

sory range. The PSR started with a: base offense level

of 7 because the statutory maximum for one of. peti-

tioner’s convictions (contempt) was more than 20 years.

PSR 9 (citing Guidelines § 2B1.1(a)(1)). Based on en-

hancements for causing a loss of more than $2.5 million

(18 levels), perpetrating a fraud on more than 250 vic-

tims (6 levels), playing a leadership role in.the offense

(4 levels), using sophisticated means (2 levels), violating

a judicial order (2 levels); and obstructing justice

(2-levels), the PSR determined that petitioner’s adjusted

offense level was 41. PSR 9-13. The PSR.then applied

a reduction of 3 levels because petitioner had accepted

responsibility by pleading guilty, yielding a total offense

level.of 38.:PSR 15-16.

The PSR determined that petitioner was in criminal

history category II,-based on his conviction in 2005 for

obstructing justice (by making false statements regard-

ing his ability to pay a fine imposed ina previous SEC

enforcement action). PSR 17. Accordingly, petitioner’s

advisory sentencing range under the 2008 Guidelines

was 262 to 327 months. PSR 29.

The PSR stated that the advisory range would have

been lower under “the November 2002.guideline manual

in effect during the commission of the offense.” PSR 29.

Under the 2002.Guidelines, the PSR estimated, petition-

er’s total offense level would have been 35 and his advi-

sory range would have been 188 to 235 months.”

“ The PSR’s estimate was inaccurate in two respects. First, it failed

to take into account the emergency amendment, effective January 25,

2003, adding the six-level enhancement for a crime involving more than

250 victims. See PSR 29; note 1, supra. As petitioner concedes (Pet.

37), that amendment was in effect at the time he committed his con-

6

b. In his sentencing memorandum, petitioner re-

stated his position that the 2001 Guidelines should be

used to calculate his advisory sentencing range. 05-cr-

00340 Docket entry No. 338, at 2-4 (N.D. Ill. May 8,

2009) (Dkt. No. 338). At his sentencing hearing on May

14, 2009, however, petitioner objected only to the

amount of loss used in determining his offense level and

to the two-level enhancement for violating a judicial or-

der. Dkt. No. 407, at 7, 17. The district court heard ar-

gument on those objections, overruled them, and asked

whether there were “[a]ny other legal issues that the

defense wishes to address|.]” /d. at 22. Counsel replied

that all such issues would “be addressed in [his] remarks

under [18 U.S.C.]} 3553(a).” ./bid. After hearing a

lengthy presentation from defense counsel and a state-

ment by petitioner, the district court postponed its sen-

tencing ruling to consider the matter further. The court

explained that it needed additional time “to think in

terms of [section] 3553[,] * * * in terms of the guide-

lines [and] * * * in terms of the very positive things”

the court had “heard about the defendant.” Jd. at 84.

When the sentencing hearing reconvened the follow-

ing month, the district court sentenced petitioner to 262

months of imprisonment, to be followed by three years

of supervised release. Pet. App. 67-68. The court ac-

knowledged that the advisory Guidelines range was

“quite high,” that petitioner had accepted responsibility

tempt and obstruction offenses in the spring of 2003. Second, the PSR

failed to take into account Guidelines § 83D1.4(b), which provides for a

one-level increase when a defendant commits multiple groups of of-

fenses and the offense level applicable to one group is between five and

eight levels lower than the other group. See Pet. App. 5; p. 9, ¢nfra.

Correctly calculated, petitioner’s total offense level and advisory range

under the 2002 Guidelines would have been the same as his total offense

level and advisory range under the 2008 Guidelines applied by the

district court. See ibid.

7

by pleading guilty, and that he had cooperated exten-

sively with the gevernment. /d. at 63. The court deter-

mined, however, that those factors were outweighed by

petitioner’s role as “the mastermind behind the [fraud]

scheme” and the nature of the offenses, which were

“well-thought-out crime[s] that took place over several

years and required a great deal of planning and precise

execution.” Jd. at 63-64. The court also stressed that

petitioner had not “learn[ed] from past mistakes,” as

evidenced by the fact that he committed the instant of-

fenses after previous securities violations that had re-

sulted in actions by the SEC and other federal and state

bodies. /d. at 65. After petitioner’s counsel asked why

the court had not varied below the Guidelines based on

petitioner’s “cooperation nor any of the 3553(a) factors,”

the court reiterated that it had “take[n] all of those mat-

ters into consideration.” Jd. at 69-71. The court stated

that it “simply [could not] ignore [petitioner’s] role” as

the mastermind of the scheme and that it therefore be-

lieved that “the guideline sentence is the appropriate

sentence in this case.” Jd. at 71.

ec. Three days after his sentencing, petitioner filed

a motion to correct his sentence under Federal Rule

of Criminal Procedure 35(a). As relevant here, he ar-

gued that the district court had violated the Ex Post

Facto Clause by calculating his advisory range under

the 2008 Guidelines rather than the 2001 Guidelines.

Dkt. No. 352, at 1-2 (June 12, 2009). The government

opposed the motion, asserting that petitioner had con-

ceded that his ex post facto claim was foreclosed by cir-

cuit precedent and that, in any event, his claim was

based on the erroneous view that the 2001 Guidelines

were in effect at the time of his offenses of conviction.

The government pointed out that the PSR had identified

the 2002 Guidelines as the version in effect during the

8

commission of the offenses and that petitioner had not

“contest{[ed} this section of the PSR” at sentencing. -Dkt.

No: 354, at 2 & n.2:(June 15, 2009).

The district court denied the Rule 35 motion, ruling

that petitioner’s ex post facto claim was foreclosed by

the Seventh Circuit’s decision in Demaree, supra. ‘Pet.

App. 14. The court reaffirmed that, “[a]s with all of the

factors raised by [petitioner],” the:court had “fully con-

sidered [his] argument under § 3553 in arriving at a sen-

tence that was sufficient but not greater than necessary

to serve the purposes of sentencing.” /d. at 15.

4. The court of appeals affirmed petitioner’s sen-

tence. Pet. App. 1-12. Petitioner first argued, and the

government agreed, that the district court had:erred

in calculating petitioner’s Guidelines range because

his base offense level should have been 6 under Guide-

lines § .2B1.1(a)(2), rather than 7 under Guidelines

§ 2B1.1(a)(1), as determined by the PSR and the district

court. Pet..C.A. Br. 15-18; Gov’t C.A. Br. 22-26. Section

2B1.1(a)(1) provides for an increase in the base offense

level for fraud offenses from 6. to 7 if “the.defendant was

convicted of an offense referenced to [Guidelines

§ 2B1.1]” and that offense “has a statutory maximum

term of.imprisonment of 20 years-or more.” As peti-

tioner and the government explained, that provision

does not apply to petitioner_ because when he committed

his fraud offenses, the statutory maxima for those of-

fenses was less than 20 years, and, although the maxi-

mum for his contempt offense exceeded 20 years, that

offense is not “referenced to” Guidelines § 2B1.1 but to

Guidelines § 2J1.1. See Pet. C.A. Br. 15; Gov’t C.A. Br.

24-25; Guidelines § 2B1.1 comment. (n.2(A)); Guidelines

§ 1B1.2(a); Guidelines App. A.

9

The court of appeals assumed that the district court

had erred in calculating petitioner’s offense level, but

found that a remand was not warranted because “any

error [wa]s harmless.” Pet App. 5. The court explained

that the one-level reduction identified by the parties

would “trigger” the one-level increase to a defendant’s

total offense level that applies when the defendant is

sentenced for two groups of offenses, one of which is

between five and eight offense levels “less serious” than

the other. /d. at 6 (citing Guidelines § 3D1.4(b)). This

one-level increase, the court reasoned, would “negat/e]

any reduction in the Guideline range.” [bid.°

After rejecting two of petitioner’s other challenges to

his sentence, the court of appeals “dispose[d].of” peti-

tioner’s argument that the district court’s use of the

2008 Guidelines in calculating his sentence violated the

Ex Post Facto Clause of the Constitution. Pet. App. 8.

The court held that petitioner’s argument was “fore-

closed by” its previous decision in Demaree, supra,

which had “held that, because the Guidelines are only

advisory in nature, a court’s use of a later version does

not offend” the Ex Post Facto Clause. /d. at 9. The

court noted that it had repeatedly adhered to that rea-

soning and found “no reason to abandon that conclusion

today.” Jbid.

ARGUMENT

Petitioner principally contends (Pet. 10-40) that the

district court’s use of the 2008 edition of the Guidelines

to caleulate his advisory sentencing range violated the

* In applying the one-level increase, the court of appeals necessarily

rejected alternative grouping methods proposed by petitioner and the

government, such as a single grouping for all offenses, that would not

have produced the one-level increase. The petition does not challenge

that determination, and the government likewise accepts the determi-

nation as law of the case.

10

Ex Post Facto Clause of the United States Constitution.

He argues that this Court should grant review to resolve

a disagreement among the courts of appeals on whether

the advisory Guidelines implicate the Ex Post Facto

Clause. Although the courts of appeals are divided on

that question, this case is not an appropriate one in

which to resolve the issue. Petitioner’s ex post facto

claim rests on the premise that the Guidelines in effect

at the time of his sentencing prescribed a harsher pen-

alty than the Guidelines in effect at the time of his of-

fense conduct. But that premise depends on the Court’s

resolving in petitioner’s favor a second and separate

issue—whether Guidelines § 1B1.11(b), which requires

use of the revised edition of the Guidelines to calculate

the advisory range when a defendant’s offenses occur

both before and after revised Guidelines take effect,

itself violates the Ex Post Facto Clause. That separate

issue was neither presented in nor addressed by the

courts below, and petitioner could not prevail on that

issue under the plain-error standard that would apply in

this Court. The Court should therefore deny the peti-

tion for a writ of certiorari.‘

1. As the government has explained in response to

other recent petitions for writs of certiorari raising the

issue, applying the advisory Guidelines in effect when a

defendant is sentenced does not raise ex post facto con-

cerns, even if those Guidelines recommend a higher sen-

tence than the Guidelines that were in effect when the

defendant committed the offense. See, e.g., U.S. Br. in

Opp. 9-14, Hensley v. United States, 130 S. Ct. 1284

(2010) (No. 09-480), 2010 WL 603304, at *6-*9. In Miller

v. Florida, 482 U.S. 423 (1987), this Court held that the

Ex Post Facto Clause barred the retroactive application

* The first question presented is also presented by Ortiz v. United

States, petition for cert. pending, No. 10-7719 (filed Nov. 24, 2010).

11

of revised state sentencing guidelines that increased a

defendant’s presumptive sentencing range compared to

the guidelines in effect at the time that the defendant

committed the offense. The Court reasoned that the

new guidelines, which “ha[{d] the force and effect of law,”

“substantially disadvantaged” the defendant, because

the state system created a “high hurdle that must be

cleared before discretion [could] be exercised” to impose

a non-guidelines sentence. /d. at 432, 435. The Court

distinguished the Florida guidelines system from the

United States Parole Commission’s guidelines, noting

that the federal parole guidelines “simply provide flexi-

ble ‘guideposts’ for use in the exercise of discretion.” Jd.

at 435.

Before United States v. Booker, 543 U.S. 220 (2005),

the federal Sentencing Guidelines (unlike the former

federal parole guidelines) were mandatory. Thus, like

the Florida guidelines at issue in Miller, the federal

Sentencing Guidelines both “hald] the force and effect

of laws,” id. at 234, and significantly constrained district

courts’ discretion to impose sentences outside of the

Guidelines range. See 18 U.S.C. 3553(b)(1). Courts of

appeals had therefore uniformly held that, under Miller,

the Ex Post Facto Clause precluded applying revised

Guidelines provisions that provided for a more severe

sentence than authorized by the Guidelines in effect

when the defendant committed the offense. See, e.g.,

United States v. Seacott, 15 F.3d 1380, 1386 (7th Cir.

1994),

This Court’s recent decisions explaining the role of

the Guidelines in post-Booker sentencing, however, have

made clear that the Guidelines, far from having the force

and effect of laws, are now only advisory and do not limit

the discretion of sentencing courts in the manner that

the guidelines at issue in Miller did. In Rita v. United

12

States, 551 U.S. 338, 341, 350-354 (2007), the Court held

that sentencing courts cannot presume a sentence within

the advisory Guidelines range to be reasonable and can-

not presume a sentence outside of the advisory range to

be unreasonable. In Gall v. United States, 552 U.S. 38,

47 (2007), the Court held that a court of appeals cannot

appiy a “rigid mathematical formula” that would de-

mand an increasingly strong justification the farther a

sentence varies from the advisory Guidelines range.

And, in subsequent decisions, the Court has made clear

both that sentencing courts may vary from the advisory

range “based solely on policy considerations, including

disagreements with the Guidelines,” and that the Guide-

lines are just “one factor among several” that “courts

must consider in determining an appropriate sentence.”

Kimbrough v. United States, 552 U.S. 85, 90, 101 (2007)

(citation omitted); see Pepper v. United States, No. 09-

6822 (Mar. 2, 2011), slip op. 23 (“[OJur post-Booker deci-

sions make clear that a district court may in appropriate

cases impose a non-Guidelines sentence based on a dis-

agreement with the Commission’s views.”); Spears v.

United States, 129 S. Ct. 840, 843 (2009) (per curiam).

Finally, the Court has held that no notice is required

when a court sentences outside the advisory range based

on the sentencing factors in 18 U.S.C. 3553(a), because

defendants no longer have “[aJny expectation subject to

due process protection” that they will receive a sentence

within the Guidelines range. Jrizarry v. United States,

553 U.S. 708, 713 (2008).

Consistent with this Court’s recent decisions, the

Seventh Circuit held in United States v. Demaree, 459

F.3d 791, 794-795 (2006), cert. denied, 551 U.S. 1167

(2007), that the Ex Post Facto Clause does not bar the

application of the version of the advisory Guidelines in

effect at the time of sentencing, even when the version

13

of the Guidelines in effect at the time of the offense pro-

vided for a lower advisory sentencing range. And the

court below correctly concluded that Demaree forecloses

petitioner’s ex post facto claim. Pet. App. 9.

As petitioner notes (Pet. 12-23), four other circuits—

the Second, Fourth, Sixth, and the District of Columbia

Circuits—have rejected the analysis in Demaree and

concluded that the Guidelines continue to implicate the

Ex Post Facto Clause even though they “are now advi-

sory” only, Kimbrough, 552 U.S. at 101 (citation omit-

ted). See United States v. Ortiz, 621 F.3d 82, 87 (2d Cir.

2010), petition for cert. pending, No. 10-7719 (filed Nov.

24, 2010); United States v. Lewis, 606 F.3d 193, 199 (4th

Cir. 2010); United States v. Lanham, 617 F.3d 873, 889-

890 (6th Cir. 2010); United States v. Turner, 548 F.3d

1094, 1099-1100 (D.C. Cir. 2008). The remaining seven

courts of appeals with criminal jurisdiction, however,

have not yet resolved the issue.”

° The Fifth, Eighth, and Eleventh Circuits have expressly stated that

the issue remains open in their courts. See United States v. Marban-

Calderon, No. 09-40207, 2011 WL 135040, at *1 (5th Cir. Jan. 18, 2011);

United States v. Deegan, 605 F.3d 625, 632 (8th Cir. 2010); United

States v. Fowler, 342 Fed. Appx. 520, 523 (11th Cir. 2009), cert. denied,

1308S. Ct. 2371 (2010). The First Circuit has also declined to “take sides

in the inter-circuit conflict,” instead adopting a non constitutional “pro-

tocol” that district courts should apply the Guidelines in effect at the

time of the offense if they are more favorable to the defendant. United

States v. Rodriguez, 630 F.3d 39, 42 (2010). The Third, Ninth, and

Tenth Circuits have assumed that the Ex Post Facto Clause continues

to limit application of amended Guidelines even under the advisory sys-

tem, but those courts have not actually decided the issue. To the extent

that petitioner suggests (Pet. 12, 15) that the Third Circuit has resolved

the issue, he is incorrect. In the published Third Circuit decision on

which petitioner relies (Pet. 15), United States v. Wood, 486 F.3d 781,

790-791, cert. denied, 552 U.S. 855 (2007), the court of appeals accepted

the government’s concession that the district court had applied the

14

2. Whether or not this Court’s resolution of the cir-

cuit conflict might be warranted in an appropriate case,

this case is not a suitable one in which to resolve the

issue, for two reasons: first, the record suggests that

petitioner would likely have received the same sentence

even if the district court had used the 2001 Guidelines to

calculate his advisory sentencing range; and, second,

determining whether petitioner’s advisory range under

the Guidelines in effect at sentencing was in fact higher

than the advisory range under the Guidelines in effect at

the time of his offense would require the Court to re-

solve an antecedent constitutional question that was not

presented in or decided by the courts below.

a. As an initial matter, this case is not an appropri-

ate vehicle to address petitioner’s ex post facto claim

because the district court’s explanation of its sentencing

decision indicates that the court would have imposed the

same sentence even if it had used the 2001 Guidelines as

petitioner requested. Under those Guidelines, peti-

tioner’s offense level would have been 36 and his advi-

sory sentencing range would have been 210 to 262

months of imprisonment.® The 262-month term that the

wrong version of the Guidelines, but the appellate court did not itself

decide the ex post facto question.

° Under the 2001 Guidelines, petitioner’s base offense level for the

fraud offense grouping would have been 6, See Sentencing Guidelines

§ 2B1.1(a). After enhancements of 18 levels for causing a loss of more

than $2.5 million (id. § 2B1.1(b)(1)(J)), 4 levels for perpetrating a fraud

on more than 50 victims (id. § 2B1.1(b)(2)(B)), 2 levels for violating a

court order (id. § 2B1.1(b)(7)(C)), 2 levels for using sophisticated means

(id. § 2B1.1(b)(8)(C)), 4 levels for a leadership role in the offense (id.

§ 3B1.1(a)), and 2 levels for obstruction of justice (id. § 3C1.1), his

adjusted offense level would have been 38. Because that offense level

is within 5 levels of the adjusted offense level of 32 for the obstruction

grouping (see 2d. §§ 21.2(c)(1), 2X3.1(a), 3B1.1(a)), the grouping en

hancement of 1 level identified by the court of appeals would apply (see

15

district court imposed would thus remain within the ad-

visory range, and the sentencing record provides no in-

dication that the court would have imposed a lower sen-

tence. The court heard extensive arguments from peti-

tioner in support of a sentence of less than 262 months,

acknowledged both the severity of that sentence and the

value of petitioner’s cooperation, and still determined

that a 262-month term of imprisonment was “sufficient

but not greater than necessary to comply with the pur-

poses” of sentencing set forth in 18 U.S.C. 3553(a). Pet.

App. 62, 71; see id. at 15. Indeed, the court adhered to

that determination even after petitioner’s counse) ques-

tioned the court about its refusal to impose a lower sen-

tence and filed a post-sentencing motion seeking to re-

duce petitioner’s sentence on two additional grounds.

See id. at 15, 69-71.

The district court stated that it believed a sentence

within the Guidelines range was “the appropriate sen-

tence in this case.” Pet. App. 71. Unlike with co-defen-

. dant Christine F'avara, however, the court did not indi-

cate an “intent” to sentence petitioner at the low end of

the Guidelines range, whatever that range was. See id.

at 10 (explaining that the district judge adjusted

Favara’s sentence to reflect the low end of the Guide-

lines range as corrected following an initial error in cal-

culation). The court instead specifically found that a

term of 262 months was “sufficient but not greater than

necessary to serve the purposes of sentencing,” id. at 15,

62, and based that conclusion on the severity of peti-

Pet. App. 5; Guidelines § 3D1.4(b)). That enhancement, combined with

a reduction of 3 levels for acceptance of responsibility and a timely

guilty plea (Guidelines § 31.1), would yield a total offense level of 36.

Combined with petitioner’s criminal history category of II, that offense

level would produce an advisory range of 210 to 262 months of imprison-

ment. See id. Ch. 5, Pt. A (Sentencing Table).

16

tioner’s offense conduct, his role as the “mastermind”

of the fraud scheme, and his commission of the instant

offenses after previous securities law violations, id. at

63-66. The record thus strongly suggests that the court

would have imposed the same 262-month sentence

whether that sentence was at the low end or the high

end of the advisory Guidelines range.

b. This case is a poor vehicle for addressing peti-

tioner’s ex post facto claim for another reason as well.

Petitioner’s claim is based on the premise that the 2008

Guidelines applied by the district court yielded a higher

advisory range than the Guidelines in effect at the time

of his offense conduct, which petitioner suggests were

the 2001 Guidelines. Pet. 7, 88-39. That premise would

only be correct, however, if the Court resolved in peti-

tioner’s favor a separate, threshold issue that has itself

divided the circuits but that was not raised in or ad-

dressed by the courts below.

i. Petitioner’s offense conduct straddled two differ-

ent versions of the Guidelines. He pleaded guilty not

only to wire and securities fraud, based on his conduct

in 2001 and 2002, but also to obstruction of justice and

contempt of court, based on actions he took in March

and April of 2008. Although the 2001 Guidelines were in

effect when petitioner committed the wire and securities

fraud offenses, the 2002 Guidelines, as amended by the

January 25, 2008 emergency amendment, were in effect

when petitioner committed the contempt and obstruc-

tion offenses. See Pet. 37 (conceding that fact). Guide-

lines § 1B1.11(b)(3) tells sentencing courts what to do in

those circumstances (to the extent the courts are using

the Guidelines in effect at the time of the offense, rather

than those in effect at sentencing). That provision in-

structs courts to apply “the revised edition of the Guide-

lines Manual * * * to both [sets of] offenses.” Guide-

17

lines § 1B1.11(b)(3). Commonly called the “one-book

rule,” the provision thus requires sentencing courts to

determine the offense level for all counts of conviction

using the Guidelines “manual in effeet at the time the

last offense of conviction was completed.” /d. § 181.11

comment. (backy’d.).

Petitioner would not have been subject to a more

favorable advisory sentencing range under the Guide

lines “in effect at the time the last offense of convic

tion was completed.” Guidelines § 1181.11 comment,

(backg’d.). Under the 2002 Guidelines as amended, peti

tioner would have been subject to the same set

of offense-level enhancements contained in the 2008

Guidelines—including the increase of 6 levels for a

fraud against more than 250 victims, Guidelines

§ 2B1.1(b)(2)(C), which forms the basis for his ex post

facto claim. See Pet. 4; Pet. App. 9. Petitioner's base

offense level under the 2002 Guidelines as amended

would have been six, which the parties agreed on appeal

(and the court of appeals accepted arguendo) was also

the correct base offense level under the 2008 Guidelines.

See pp. 8-9, supra; Pet. App. 4-6. But, under the 2002

Guidelines, as under the 2008 Guidelines, petitioner

would also have been subject to the one-level increase

under the grouping rules that the court of appeals iden

tified. See Pet. App. 5-6; Guidelines § 3D1.4(b). The

upshot is that petitioner would have faced the same total

offense level (88) and the same advisory sentencing

range (262 to 327 months) under the amended 2002

Guidelines as under the 2008 Guidelines used by the dis

trict court. See note 2, supra.

ii. The only way that petitioner can avoid that result,

and establish that he faced a less-favorable advisory

range under the 2008 Guidelines, is to show that the one

book rule in Guidelines § 1B1.11(b)(3) cannot be applied

18

to him. Petitioner urges the Court (Pet. 33-40) to reach

that conclusion, arguing that application of the one-book

rule would itself violate the Ex Post Facto Clause.

Petitioner did not, however, present that argument

in the district court or the court of appeals, and neither

of those courts addressed it. On the contrary, in the

district court, petitioner did not object to the PSR’s

statement that the 2002 Guidelines were the ones “in

effect during the commission of the offense.” PSR 29.

Nor, following his motion to correct his sentence, did

petitioner respond to the government’s arguments that

the PSR was correct on this point and that petitioner

had failed to object to the relevant portion of the PSR at

the sentencing hearings. See Dkt. No. 354, at 2 n.2

(June 15, 2009). In his brief to the court of appeals, peti-

tioner even recited the PSR’s statement that the 2002

Guidelines were the ones in effect during the commis-

sion of his offenses, although he also repeated the PSR’s

erroneous estimate that the offense level under the 2002

Guidelines would have been 35. Pet. C.A. Br. 36; see

note 2, supra (explaining errors in PSR’s offense-level

estimate under 2002 Guidelines).

To decide whether the factual premise for peti-

tioner’s principal claim is correct, therefore, the Court

would have to address a threshold constitutional ques-

tion that was not raised in or resolved by the courts be-

low. This Court is, however, one “of review, not of first

view,” Cutter v. Wilkinson, 544 U.S. 709, 718 n.7 (2005),

and it does not ordinarily address issues that were nei-

ther pressed nor passed upon in the court of appeals, see

United States v. Williams, 504 U.S. 36, 41 (1992). The

Court should therefore decline to consider petitioner’s

challenge to the one-book rule.

iii. Resolution of that challenge is especially unwar-

ranted because, by failing to raise the challenge in the

19

district court or the court of appeals, petitioner forfeited

his constitutional claim. The challenge to the one-book

rule would thus be reviewed only for plain error. See

Fed. R: Crim. P. 52(b). Petitioner would have to show

that applying the amended 2002 Guidelines in his case

would be error; that the error is clear or obvious; that

the error affected his substantial rights; and that the

error seriously affected the fairness, integrity, or public

reputation of the proceedings. See United States v.

Marcus, 130 S. Ct. 2159, 2164 (2010). Petitioner could

not make that showing.

Petitioner could not show any effect on his substan-

tial rights because, for the reasons described above, the

district court would not have imposed a lower prison

term even if the court had used the 2001 version of the

Guidelines. See pp. 14-16, supra. And petitioner could

not show that any error in applying the amended 2002

Guidelines under the one-book rule would be clear or

obvious. As petitioner points out (Pet. 35), the courts of

appeals are divided on the question of whether the one-

book rule violates the Ex Post Facto Clause.’ In those

” Compare United States v. Kumar, 617 F.3d 612, 628 (2d Cir. 2010)

(the one-book rule “does not violate the Ex Post Facto clause when

applied to the sentencing of offenses committed both before and after

the publication of a revised version of the Guidelines”), petition for cert.

pending, No. 10-961 (filed Jan. 24, 2011); United States v. Duane, 533

F.3d 441, 449 (6th Cir. 2008) (same); United States v. Sullivan, 255 F.3d

1256, 1262-1263 (10th Cir. 2001) (same), cert. denied, 534 U.S. 1166

(2002); United States v. Lewis, 235 F.3d 215, 218 (4th Cir. 2000) (same),

cert. denied, 534 U.S. 814 (2001); United States v. Vivit, 214 F.3d 908,

919 (7th Cir.) (same), cert. denied, 531 U.S. 961 (2000); United States v.

Kimler, 167 F.3d 889, 893-895 (5th Cir. 1999) (same); United States v.

Bailey, 123 F.3d 1381, 1404-1407 (11th Cir. 1997) (same); and United

States v. Cooper, 35 F.3d 1248, 1251-1252 (8th Cir. 1994) (same),

vacated, 514 U.S. 1094 (1995), reinstated, 63 F.3d 761, 762 (8th Cir.

1995), with United States v. Ortland, 109 F.3d 539, 547 (9th Cir.) (one-

book rule violates the Ex Post Facto Clause where defendant’s “sen-

20

circumstances, an error cannot be clear or obvious. See,

e.g., United States v. Williams, 469 F.3d 963, 966 (11th

Cir. 2006) (no plain error when there is no controlling

case law and circuits are split); United States v. Teague,

443 F.3d 1310, 1319 (10th Cir.) (same), cert. denied, 549

U.S. 911 (2006); see also United States v. Castillo-

Estevez, 597 F.3d 238, 241 (5th Cir.) (where circuits di-

vided on merits of ex post facto challenge, the case law

revealed a “reasonable dispute” about issue and pre-

cluded a finding of plain error), cert. denied, 131 S. Ct.

457 (2010).

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

NEAL KUMAR KATYAL

Acting Solicitor General

LANNY A. BREUER

Assistant Attorney General

ScoTT A.C. MEISLER

Attorney

MARCH 2011

tence on earlier, completed counts [is] increased by a later Guideline”),

cert. denied, 552 U.S. 851 (1997); United States v. Bertolt, 40 F.3d 1384,

1404 (3d Cir. 1994) (same), cert. denied, 517 U.S. 1137 (1996).