United States v. Davis ( 2008 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 08a0289p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellant, -
UNITED STATES OF AMERICA,
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No. 05-3784
v.
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WILLIAM J. DAVIS, -
Defendant-Appellee. -
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On Remand from the United States Supreme Court.
No. 99-00110—Walter H. Rice, District Judge.
Argued: June 2, 2006
Decided and Filed: August 12, 2008
Before: BOGGS, Chief Judge; KEITH and SUTTON, Circuit Judges.
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COUNSEL
ARGUED: Benjamin C. Glassman, ASSISTANT UNITED STATES ATTORNEY, Cincinnati,
Ohio, for Appellant. C. Mark Pickrell, WALLER, LANSDEN, DORTCH & DAVIS, Nashville,
Tennessee, for Appellee. ON BRIEF: Benjamin C. Glassman, ASSISTANT UNITED STATES
ATTORNEY, Cincinnati, Ohio, for Appellant. C. Mark Pickrell, WALLER, LANSDEN, DORTCH
& DAVIS, Nashville, Tennessee, for Appellee.
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OPINION
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SUTTON, Circuit Judge. A jury convicted William Davis of two counts of bank fraud, after
which the district court calculated a sentencing-guidelines range of 30 to 37 months. The court
imposed a sentence of one day in prison because, among other reasons, Davis was 70 years old at
the time of sentencing and because he had committed the underlying crimes 14 years earlier. We
reverse because the second explanation for the court’s sentence represents an inappropriate
sentencing factor on this record.
I.
In 1990, Davis applied for and received a $1.6 million line of credit from a local bank for
Fries Correctional Equipment of Kentucky, a business in which he was a part owner and president.
Davis agreed to be a personal guarantor of the line of credit. When the bank renewed the line of
credit in 1991, Davis submitted a financial statement that omitted a $100,000 debt he had incurred
during the previous year.
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Fries Correctional defaulted on the loan in 1992, and the bank, invoking the personal
guarantee, filed a civil action against Davis. In April 1992, during a deposition in the civil action,
Davis claimed that he no longer owned several securities listed in the 1991 financial statement.
Other financial documents, however, showed this claim to be false, revealing that he had continued
to own the securities until October 1992, when he sold them.
In 1992, Davis and his wife declared bankruptcy. And in August 1993, the federal
government notified Davis that it intended to initiate criminal proceedings against him as a result
of the defaulted loan. When the Davis bankruptcy ended in 1996, the bank had yet to recover
roughly $600,000 in loan proceeds.
On December 15, 1999, the government indicted Davis. And on May 23, 2002, a jury
convicted him of two counts of bank fraud—one relating to the omission of the $100,000 loan from
his 1991 financial statement, the other relating to the false claims he made during his April 1992
deposition.
In August 2003, the district court sentenced Davis. Applying the then-mandatory guidelines,
it used a base-offense level of 6 and added 14 levels due to the amount of the loss. The court
rejected Davis’s requests for a downward departure based on:
(1) acceptance of responsibility, see JA 381 (noting that Davis had “contested the
facts and the implications to be drawn from them”);
(2) post-conduct rehabilitation, see JA 385 (“There, quite frankly, is no evidence that
this defendant now is an improved human being over what he was before this offense
. . . .”); JA 387 (citing Davis’s testimony at sentencing as an additional justification
for denying the departure and noting that the testimony “was not as candid as
perhaps it could be”);
(3) the government’s delay in bringing the indictment, see JA 391 (“It would be
difficult to say that a prosecution brought within the applicable statute of limitations
is something outside the heartland of cases and beyond the thinking of the framers
of the guidelines.”); and
(4) the claim that the guidelines range did not accurately reflect the seriousness of
the offense, see JA 384 (noting that the sentencing range did not overstate the
seriousness of the offense).
All of this left Davis with a guidelines range of 33 to 41 months. “Normally,” the court
noted, it “would be inclined to sentence in the middle or upper reaches of the guideline range,” JA
393, but it decided to impose a 33-month sentence on each of the two counts (to run concurrently)
and 5 years of supervised release. In choosing the low end of the guidelines range, the court relied
on Davis’s age at the time (69) and the delay between the bank fraud and sentencing (11 years). The
court did not impose restitution because Davis could not afford it.
On appeal, this court affirmed Davis’s conviction but remanded the case for resentencing.
See United States v. Davis, 397 F.3d 340, 342 (6th Cir. 2005). As to the sentencing aspect of its
decision, the court reasoned that the district court had calculated the sentence under the 2002
Guidelines Manual instead of the more lenient version in effect when Davis committed the offense
(the 1991 version), and that the court’s imposition of a sentence under mandatory guidelines violated
United States v. Booker, 543 U.S. 220 (2005). See Davis, 397 F.3d at 350–52.
On April 29, 2005, the district court resentenced Davis. Using the 1991 version of the
guidelines, the district court set Davis’s base offense level at 6, then applied an 11-level
No. 05-3784 United States v. Davis Page 3
enhancement due to the amount of the loss, see U.S.S.G. § 2F1.1 (1991), then added a 2-level
enhancement for more-than-minimal planning in committing the offense, see id. § 2F1.1(b)(2).
After concluding that Davis did not deserve a downward departure, the court determined that his
criminal history category (I) and his offense level (19) intersected at an advisory guidelines range
of 30 to 37 months. See JA 408.
The court then considered the other factors listed in 18 U.S.C. § 3553(a) in deciding whether
to deviate from the guidelines range. It first considered Davis’s characteristics and history, see
§ 3553(a)(1), noting his age (“70 years and seven months”), that he was retired, that he had “moved
back to Ohio to be near his family and his grandchildren” and that he had one prior offense (which
was committed when he was a young man), JA 409. The court turned to the offenses of conviction,
see § 3553(a)(1), which the court recognized were “serious when committed” and that “they remain
serious,” JA 409. The court pointed out, however, that the offenses had been committed “14 years
ago.” Id. It also noted that the defendant’s “age and the length of time between the commission of
the offenses and the date of sentencing” warranted consideration after Booker even though they were
not “proper” to consider as grounds for a downward departure under the guidelines. Id.
In addressing “the public’s interest in safety,” see § 3553(a)(2)(C), the court concluded that
“the public is in no danger from this defendant” because Davis is “retired,” “[h]e does not control
a business and in all probability has no desire to do so,” JA 409–10. As for punishment, see
§ 3553(a)(2)(A), the court noted that for “punishment to be effective [it] must be reasonably close
to the offense committed or it becomes, while not cruel and unusual, it becomes, I think, doubly
erroneous,” JA 410. The court was also “satisfied that the factors that [it] set forth . . . are such that
the sentence . . . will not promote disrespect for the law.” Id.; see § 3553(a)(2)(A). As for
deterrence, see § 3553(a)(2)(B), the court concluded that any sentence—whether it was “a
day . . . [or] 10 years or anything in between”—“would be sufficient to deter this defendant from
committing further crimes,” JA 411.
Because the court believed that “the factors in this case are unique enough,” it concluded
“that others who might be inclined to commit bank fraud are not likely to engage in that course of
conduct in the hope that they will be treated as leniently” as the defendant. Id. The district court
reasoned that the public’s interest in rehabilitation, see § 3553(a)(2)(D), had been well-served
because Davis had been, “in effect, rehabilitated by the passage of time,” JA 411. The potential for
“disparity in sentence between persons similarly situated who commit certain crimes,” see
§ 3553(a)(6), was likewise not a concern because “[i]n th[e] Court’s opinion, and recollection, it has
dealt with very few 70-year-old people who were brought before the Court for sentencing 14 years
after the fact,” JA 411–12. Restitution also was not an issue because, as the court had found at
Davis’s original hearing (a finding the government did not appeal), Davis had no ability to pay
restitution.
Taking all of these considerations into account, the court sentenced Davis to one day in
prison for each of the two bank-fraud counts (running concurrently and with credit for the one day
served when the U.S. Marshals took him into custody), three years of supervised release (including
one year of home confinement) and 100 hours of community service.
On appeal, this court reversed. See United States v. Davis, 458 F.3d 491 (6th Cir. 2006).
We held that Davis’s age at the time of sentencing (70) and the gap in time between the crimes and
his sentencing hearing (14 years) did not justify such a substantial variance—from 30–37 months
to one day. See id. at 500. The Supreme Court granted Davis’s certiorari petition, vacated our
decision and remanded the case for reconsideration in light of Gall v. United States, __ U.S. __, 128
S. Ct. 586 (2007). See Davis v. United States, __ U.S. __, 128 S. Ct. 856 (2008).
No. 05-3784 United States v. Davis Page 4
II.
In United States v. Grossman, 513 F.3d 592 (6th Cir. 2008), we explained Gall’s impact on
appellate review of district court variances:
While Gall permits appellate courts, “[i]n reviewing the reasonableness of a
sentence outside the Guidelines range,” to continue to “take the degree of variance
into account and consider the extent of a deviation from the Guidelines,” it offers two
important qualifications. 128 S. Ct. at 594–95. It “reject[s] . . . an appellate rule that
requires ‘extraordinary’ circumstances to justify a sentence outside the Guidelines
range.” Id. And it “reject[s] the use of a rigid mathematical formula that uses the
percentage of a departure as the standard for determining the strength of the
justifications required for a specific sentence.” Id.
At the same time that Gall bars a “rigid mathematical formula” for reviewing
outside-guidelines sentences, it permits district and appellate courts to require some
correlation between the extent of a variance and the justification for it. Id. In
describing the duty of a sentencing judge, the Court says: “If he decides that an
outside-Guidelines sentence is warranted, he must consider the extent of the
deviation and ensure that the justification is sufficiently compelling to support the
degree of the variance. We find it uncontroversial that a major departure should be
supported by a more significant justification than a minor one.” Id. at 597. In
describing the duty of an appellate court, the Court says: “It may consider the extent
of the deviation, but must give due deference to the district court’s decision that the
§ 3553(a) factors, on a whole, justify the extent of the variance.” Id.
Perhaps most importantly, Gall shows that the sentencing process involves
an exercise in judgment, not a mathematical proof. As a result, appellate courts must
“give due deference to the district court’s decision that the § 3553(a) factors, on a
whole, justify the extent of the variance,” id., and due deference to the sentencing
judge’s on-the-scene assessment of the competing considerations, id. at
597–98—which is to say, not just abuse-of-discretion review to the reasonableness
of a sentence but abuse-of-discretion review to the district court’s determination that
there is a legitimate correlation between the size of the variance and the reasons
given for it, see id. at 591.
Id. at 596.
Gauged by these requirements, Davis’s case is not an easy one. If we focus on the
individualized-sentencing side of the equation—deference to the district court judge and his “on-the-
scene assessment” of the § 3553(a) factors—the case looks like an affirmance. If we focus on “the
extent of the deviation and ensure that the justification is sufficiently compelling to support the
degree of the variance,” Gall, 128 S. Ct. at 597, the case gets harder. Even after Gall, appellate
courts still have some role to play, even if it is a modest one, in ensuring that there is some
consistency between and among district-court sentencing practices, see Booker, 543 U.S. at 263
(noting that appellate review permits “sentencing differences” to be “iron[ed] out”), and in ensuring
that variances turn on legitimate sentencing considerations, see United States v. Bailey, 488 F.3d
363, 368 (6th Cir. 2007) (“A sentence may be substantively unreasonable where the district court
bases the sentence on impermissible factors . . . .”) (internal quotation marks and alterations
omitted); United States v. Hunt, 521 F.3d 636, 649–50 (6th Cir. 2008).
The district court discussed several relevant factors in imposing Davis’s sentence, including
the reality that Davis’s crime was non-violent, that he had committed no further criminal activity
since his offense and that he was bankrupt and unemployed and therefore unlikely to commit another
white-collar crime. Two other factors that featured prominently in the district court’s sentencing,
No. 05-3784 United States v. Davis Page 5
however, merit further consideration: the 14-year gap between Davis’s crimes and his second
sentencing hearing and Davis’s age (70) at the time of sentencing. The first of these two reasons
represents an inappropriate sentencing factor on this record, and the second reason in conjunction
with the other circumstances of Davis’s case may well support a variance, though we leave it to the
district court to decide in the first instance how great any variance should be.
Section 3553(a) does not list the amount of time that passed between the date of a
defendant’s crime(s) and his sentencing as a basis for lowering or raising a sentence. And it is not
a criterion that naturally lends itself to deciding how long a sentence should be. If a lengthy delay
between crime and punishment warrants a shorter prison term, as happened here, then it would seem
to follow that a brief delay warrants a longer prison term. Yet no one suggests—indeed, we doubt
anyone ever has suggested—that a district court may impose a longer sentence on this basis. The
underlying prosecution in this case, moreover, occurred within the statute-of-limitations period.
And Davis has not raised any speedy-trial objections to the prosecution. Nor, at any rate, is it
invariably clear whether a legal delay in prosecuting or sentencing helps or hurts an individual.
What criminal suspect wants the government (and grand jury) to pull the indictment trigger too
quickly? And how often do elderly criminal defendants such as Davis seek expedited sentencing?
But to the extent such a delay might legitimately bear on a trial court’s exercise of sentencing
discretion, a point we need not decide, reliance on this factor at a minimum should require some
evidence that the government bears unjustified responsibility for the delay and that the defendant
suffered from the delay. As the district court itself noted in issuing this sentence, however, any
delays in indicting and prosecuting Davis flowed from “very practical reasons,” not “any malicious
motive” on the part of the government. JA 410.
Consistent with the district court’s understanding, most if not all of the 14-year
delay—between 1991 when Davis omitted a $100,000 debt on a financial statement to the bank and
the April 2005 sentencing—was caused by legitimate considerations. One of the intervening years
hardly counts because the second fraudulent act did not occur until 1992, when Davis did not
disclose his continued ownership of certain securities. Another four years should not factor into the
equation because the government could not know the extent of the loss from the fraud (and Davis’s
ability to repay the debt) until the end of Davis’s bankruptcy in 1996. While the government took
another three years to indict him (though it still acted within the statute of limitations), the record
offers no suggestion that the three years were used for anything other than ensuring that the financial
records showed that a fraud had occurred and that the government wished to exercise its
prosecutorial discretion in bringing the charges. Another three years or so involved the gap between
the indictment and the jury conviction in 2002, but Davis presumably consented to this delay, as he
does not bring a speedy-trial challenge. Another year was occupied with preparing for the
sentencing hearing, a proceeding that Davis apparently (and understandably) made no effort to
expedite. And the two years between his first sentencing hearing (2003) and his second (2005)
stemmed from Davis’s success in making a Booker argument (among other arguments) on appeal.
Delays between the time a crime is committed and the time a guilty defendant serves his
sentence of course should not be casually ignored. But the question here is not whether the delay
violated Davis’s statutory or constitutional rights or even whether the delay undermined the federal
government’s efforts to vindicate the purposes of this criminal statute. The question is whether the
delay supplies an independent reason for a deviation from the advisory guidelines range. The
district court concluded that the delay did not authorize a downward departure either before Booker
or after, and we agree. Neither, however, do we see how the delay favors a variance when there has
been no finding of government misconduct and no finding that the delay prejudiced the defendant.
To be sure, an interval of years between a crime and the commencement of a sentence may affect
the application of certain § 3553(a) factors. Time, for example, may allow a defendant to make
whole all of the victims of his crime, or it may allow him to show demonstrable signs of
rehabilitation. But, on this record, it remains to be seen how the passage of time by itself justified
this variance.
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What the delay principally did when it comes to the § 3553(a) factors was to allow the
defendant to age—and age, the second reason for the district court’s variance, may indeed be a
legitimate basis for a variance. The defendant was 56 when he committed the first crime, and he was
70 at the time of the second sentencing hearing. When he committed the crime, he was of an age
that would not likely bear on a guidelines range of 30 to 37 months. And when he was eventually
sentenced, he was of a certain age (and retired from the profession from which he participated in the
bank fraud), both of which might affect a trial judge’s decision to grant a variance.
True, the guidelines said in 1991 (and likewise say today) that “[a]ge . . . is not ordinarily
relevant in determining whether a sentence should be outside the applicable guideline range.”
U.S.S.G. § 5H1.1 (1991); see also U.S.S.G. § 5H1.1 (2004). That is why the district court correctly
concluded at Davis’s first and second sentencing hearings that he could not grant a downward
departure based on Davis’s age. But a trial judge’s authority to exercise independent judgment in
granting a variance after applying the § 3553(a) factors differs from his authority to grant departures.
For example, while § 3553(a)(5) directs a sentencing court to consider “any pertinent policy
statement[s]” issued by the Sentencing Commission (which would include the age-as-a-discouraged-
factor provision), § 3553(a)(1) directs a sentencing court to consider the “history and characteristics
of the defendant.” In an appropriate case, a trial court, in exercising the “broad discretion” that
Booker gives it “in imposing a sentence within a statutory range,” 543 U.S. at 233, has a freer hand
to account for the defendant’s age in its sentencing calculus under § 3553(a) than it had before
Booker. See United States v. Smith, 445 F.3d 1, 5 (1st Cir. 2006) (holding that district court’s
consideration at sentencing of defendant’s age was not inappropriate and noting that even though
“a factor is discouraged or forbidden under the guidelines,” that “does not automatically make [the
factor] irrelevant when a court is weighing the statutory factors apart from the guidelines”).
To say that a district court may account for a defendant’s age at sentencing, however, is not
to say that Davis’s age (70) by itself warrants a one-day sentence. The record shows that the fraud
caused over $900,000 in loss; Davis did not repay the lost money; he did not accept responsibility
for the crimes; and he has yet to show remorse for the crimes. And all of this occurred in the context
of a white-collar crime: One of the central reasons for creating the sentencing guidelines was to
ensure stiffer penalties for white-collar crimes and to eliminate disparities between white-collar
sentences and sentences for other crimes. See United States v. Brewer, 899 F.2d 503, 508 (6th Cir.
1990) (citing Stephen Breyer, The Federal Sentencing Guidelines and the Key Compromises upon
Which They Rest, 17 Hofstra L. Rev. 1, 20–22 (1988), and U.S.S.G. ch. 1, pt. A, introductory cmt.)
(noting that the guidelines were an attempt by the Sentencing Commission to address discrepancies
and inequities between sentences for white-collar crimes and other crimes), overruled in part on
other grounds by Koon v. United States, 518 U.S. 81 (1996); see also United States v. Martin, 455
F.3d 1227, 1240 (11th Cir. 2006) (“The fact that Martin’s guidelines range was 108–135 months’
imprisonment evinces Congress’s attempt to curb judicial leniency in the area of white collar
crime.”).
While the district court stated that the sentence still would promote respect for the law, it
never explained how that could be so given these sentencing facts—facts that the district court did
not discuss, much less contradict, in explaining this component of its ruling. While the district court
recognized that the offenses of conviction were “serious,” JA 409; see 18 U.S.C. § 3553(a)(2)(A),
it did not explain how the one-day sentence it gave Davis meshed with Congress’s own view of the
crimes’ seriousness—as expressed through a statutory prohibition on probationary sentences in this
setting, see id. §§ 3559, 3561. While the district court indicated that this sentence would serve the
goals of societal deterrence, see id. § 3553(a)(2)(B), it is hard to see how a one-day sentence for a
lucrative business crime satisfies that goal, see Martin, 455 F.3d at 1240 (“Because economic and
fraud-based crimes are more rational, cool, and calculated than sudden crimes of passion or
opportunity, these crimes are prime candidates for general deterrence.”) (internal quotation marks
and alteration omitted). And while age may well be an appropriate factor in choosing to grant a
No. 05-3784 United States v. Davis Page 7
downward variance, the notion that the status of being 70 years old makes serving any prison time
pointless is not self-evident. Cf. United States v. Tocco, 200 F.3d 401, 434 (6th Cir. 2000).
Under these circumstances, Davis needs to be resentenced. One of the district court’s
explanations for this sentence—the time interval between Davis’s crimes and sentencing
hearing—does not support a variance. And the other predominant explanation the district court gave
for the sentence—Davis’s age—may well support a variance, though it remains unclear whether the
district court thought age, along with the other circumstances of Davis’s case, would warrant a one-
day sentence and whether such a sentence would be supportable in light of Congress’s determination
that probation is not an appropriate sentence for this crime. We leave it to the district court to decide
these matters in the first instance.
All of this, however, should not obscure a broader point. While appellate courts retain
responsibility for identifying proper and improper sentencing considerations after Booker, it is not
our task to impose sentences in the first instance or to second guess the individualized sentencing
discretion of the district court when it appropriately relies on the § 3553(a) factors in granting a
downward or upward variance. See United States v. Vonner, 516 F.3d 382, 392 (6th Cir. 2008) (en
banc). In this case, however, the district court relied in part on an inappropriate sentencing
consideration—the gap in time between the underlying crimes and his sentencing hearing. On
remand, we leave it to the district court to exercise its ample discretion after Booker and Gall to
impose a sentence sufficient but not greater than necessary to serve the § 3553(a) factors.
III.
For these reasons, we reverse and remand the case for resentencing.