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. e du/thir dc ir c uit_2000/142Filed July 10, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NO. 99-3701

CHRISTOPHER FURNARI, Appellant

v.

WARDEN, Allenwood Federal Correctional Institution; UNITED STATES PAROLE COMMISSION;

M.D. OF PA UNITED STATES ATTORNEY

On Appeal From the United States District Court For the Middle District of Pennsylvania (D.C. Civ. No. 98-cv-00222) District Judge: Honorable Malcolm Muir

Argued: April 26, 2000

Before: BECKER, Chief Judge, BARRY and BRIGHT,* Circuit Judges.

(Filed: July 10, 2000)

___________________________________________________ ______________ * Honorable Myron H. Bright, United States Circuit Judge for the Eighth Circuit, sitting by designation.STEVEN R. KARTAGENER,

ESQUIRE (ARGUED) 222 Broadway - Suite 2700 New York, NY 10007

DAVID BREITBART, ESQUIRE
52 Duane Street New York, NY 10007

Counsel for Appellant

DAVID BARASCH, ESQUIRE United States Attorney
THEODORE B. SMITH, III, ESQUIRE (ARGUED) Assistant United States Attorney
DULCE DONOVAN, ESQUIRE Assistant United States Attorney

228 Walnut Street

P.O. Box 11754 Harrisburg, PA 17108

SHARON GERVASONI, ESQUIRE
United States Parole Commission One North Park Building 5550 Friendship Boulevard Chevy Chase, MD 20815

Counsel for Appellees

OPINION OF THE COURT

BECKER, Chief Judge.

This is an appeal by Christopher Furnari from an or der
of the District Court for the Middle District of Pe nnsylvania denying his petition for a writ of habeas corpus. T he petition challenged the United States Parole Commis sion's initial determination, affirmed by its National App eals Board, consigning Furnari to offense Category Eight

. Category Eight is the severest category under the p arole regulations, and for Furnari the designation means a fifteen-year postponement of parole consideration. Furnari, who at various times was capo and consigliere in th e

2Lucchese crime family, was convicted in 1986 of ext ortionbased RICO violations and sentenced to a term of 10 0 years. See United States v. Salerno, 868 F.2d 524, 527-28 (2d Cir. 1989) (appeal from conviction). At issue i n the habeas petition is the Commission's determination t hat
there was sufficient evidence to tie Furnari to a n umber of murders, which automatically led to the Category Ei ght designation.

While Furnari's habeas petition was pending before the District Court, he supplemented it by filing a copy of an affidavit submitted by a government attorney to the United States District Court in Brooklyn, New York. The af fiant declared that the individual on whom the government had principally relied to tie Furnari to the murders ha d lied in another case and was unreliable. During the same ti me frame, Furnari had a statutory interim hearing befo re the Commission, at which he presented the information i n the affidavit, but the Commission denied his request fo r a de novo hearing.

We take judicial notice of the Parole Commission's decision denying Furnari a de novo hearing. Our sta ndard
of review of the Parole Commission's determination is extremely deferential. Nevertheless, because the Ap peals
Board did not make clear in its decision on the int erim hearing whether it continued to believe that the di scredited
witness was credible or otherwise concluded that th ere was sufficient information from other sources to tie Fu rnari to murder, we conclude that the Parole Commission abus ed its discretion by failing to follow its regulation requiring a statement of reasons for denying parole. We conclud e that, under the governing statute and regulations, our ca se law requiring a statement of reasons is properly extend ed to the explanation of action at an interim hearing in circumstances where significant new information has been presented to the Commission. We will therefore vaca te the
order of the District Court and remand with instruc tions to grant Furnari's petition conditionally and order th e Parole Commission to provide a new statement of reasons
consistent with this decision.

3I.

Pursuant to the Parole Commission's Guidelines, 28 C.F.R. S 2.20, Subchapter A, S 201, participation i n a murder places a potential parolee in Severity of Of fense Behavior Category Eight, which is the most serious offense level and requires the service of the longest priso n term prior to parole consideration. At Furnari's initial Parole Hearing, the Parole Commission concluded that Furna ri was a Category Eight, which means that he has to se rve fifteen more years before his next de novo parole h earing.1

The Parole Commission concluded that Furnari had participated in a murder based on information provi ded by Assistant United States Attorney for the Southern D istrict of New York David Kelley, who stated that three dif ferent people had provided information to the government a bout Furnari's involvement in several murders. They were Anthony "Gaspipe" Casso (a Lucchese family hitman), Thomas "Tommy Irish" Carew (a Lucchese family assoc iate), and Alfonse D'Arco (a former acting Lucchese family boss).

Before the hearing, Furnari wrote to the Parole Commission, urging it to reject any information pro vided by Casso because he had not been tested by cross

___________________________________________________ ______________

1. The Sentencing Reform Act of 1984 ("SRA"), Pub. L. No. 98-473, Title II, 98 Stat. 1987 (1984), abolished parole, see SR A S 218(a)(5), 98 Stat. 2027, 2031, but only for offenses committed after N ovember 1, 1987, see Sentencing Reform Amendment Act of 1985, Pub. L. No . 99-217, S 4, 99 Stat. 1728. Furnari's offenses occurred prior to No vember 1, 1987. Section 235 of the Sentencing Reform Act of 1984 pr eserves the Parole Commission and the federal parole statutes for a pe riod of time for transition to the new system. Section 235(b)(1) pro vides that 18 U.S.C. SS 4201-18, which created the Parole Commission and contain the parole law, "remains in effect for five years after the ef fective date [of the
Act]." 98 Stat. at 2027, 2032-33. The original five-year t ransition period would have expired on October 31, 1992. This section of t he SRA has been amended twice. In 1990, the five-year transition pe riod was extended to ten years, see Pub. L. No. 101-650, Title III, S 31 6, 104 Stat. 5115 (1990), to November 1, 1997, see Sentencing Reform Amendments Act of 1985, Pub. L. No. 99-217, S 4, 99 Stat. 1728 (1985) . In 1996, the tenyear period was extended to fifteen years. See Pub . L. No. 104-232, SS 1- 3, 110 Stat. 3055 (1996). Accordingly, the transiti on period does not now expire until October 31, 2002.

4examination in any criminal trial. In addition, Fur nari

requested that the Parole Commission not consider K elley's letter unless certain FBI 302s (which concern the d ebriefing of witnesses) for Carew and D'Arco were provided. F urnari also wrote to Kelley asking for the 302 forms. Kell ey declined to release the forms on the basis that Fur nari had not cited any authority showing that he had a right to
them.

At the hearing, Furnari's counsel attacked Casso's credibility. He also argued that D'Arco's statement regarding Furnari's knowledge of murders carried ou t when he was consigliere was not credible, because D'Arco was in custody from 1983 through 1986 (when Furnari was consigliere) and would have known about Furnari's involvement only through hearsay. Furnari also clai med that there were no murders committed by the family while he was consigliere.

Kelley responded by acknowledging that "most of the information does come from Casso" and by defending Casso, stating that he was and would continue to be viewed as a reliable government witness. Kelley also noted that Furnari had conceded that D'Arco was an expert on t he hierarchy and structure of organized crime, and not ed that D'Arco had stated that murders committed by Furnari 's crew while Furnari was a capo would only have been done with his knowledge and consent. Kelley stated that there were a number of murders by the family both when Fu rnari was capo and when he was consigliere.

The hearing examiner requested that Kelley submit further information regarding murders by the family , and afforded Furnari's counsel the opportunity to respo nd to information provided by Kelley. Kelley detailed fou rteen murders committed by members of Furnari's crew duri ng the time he was capo and consigliere. At least five of these occurred after he became consigliere. Kelley furthe r represented that D'Arco and two other sources had s tated that, immediately before he was convicted, Furnari met with other members of the Lucchese family hierarchy to select successors. According to these sources, the meeting participants decided that Anthony Luongo would pose a threat to the new administration and should be kill ed.

5Casso and Vittorio Amuso were reportedly instructed to

murder Luongo, and they did.

Furnari argued that the Parole Commission could not consider any of the information because of the government's refusal to release the 302 forms and a lso because the reported testimony of Carew and D'Arco from other trials did not include statements implicating Furnari in these murders. He contended that the allegation regarding Luongo "had already been dealt with," see mingly referencing Furnari's own statement in a prior subm ission that Casso undertook to kill Luongo on his own.

The hearing examiner rated Furnari a Category Eight . He recommended that Furnari be required to serve to af ifteenyear reconsideration hearing in December 2011, find ing that releasing Furnari on parole would depreciate t he seriousness of the offense and promote disrespect f or the criminal justice system. The National Appeals Board
affirmed this decision.

In 1998, Furnari, then an inmate of the Federal Penitentiary at Lewisburg, Pennsylvania, filed a pe tition for writ of habeas corpus in which he challenged the de nial of parole. He asserted that he was denied due process because the Parole Commission, without a rational b asis to do so, relied on information that he was involved i n murders. The District Court found that, assuming th at there is a liberty interest in parole, Furnari was not denied due process because there was a rational basis in t he record before the Parole Commission to support its decision, and denied the petition.

On appeal, Furnari supports his argument that Casso was unreliable by describing events that took place after the initial parole decision. In 1997, in an unrelat ed trial in the Eastern District of New York, the government, t hrough an affidavit filed by Assistant United States Attor ney George A. Stamboulidis, took the position that Casso was a n unreliable witness and informed opposing counsel an d the court that it did not intend to rely on him. The U. S. Attorney's Office then canceled Casso's cooperation agreement. Furnari argues that this information sho ws that the government knew all along that Casso was unreli able,

6and that, at all events, it is now incontrovertible both that

Casso is not credible and that there is no specific evidence to tie Furnari to any murder.

While this habeas petition was pending before the District Court, Furnari received a two-year, interi m review of the original action by the Parole Commission. Th is review is required by statute. See 18 U.S.C. 4208(h); 28 C .F.R. S 2.14. At that hearing, Furnari's counsel presente d all of the new information demonstrating the government's doubts about Casso's reliability. The Parole Commis sion upheld the original denial of parole, and the Appea ls Board affirmed that decision. The Appeals Board expressly denied Furnari's application for a de novo parole hearing to consider the newly discovered information, stating that "[i]n response to your claim that the decision was based on erroneous information, the evidence you have presen ted does not persuade the Commission that the informati on it has relied upon is inaccurate. Your request for a d e novo hearing is denied." Days later, the District Court denied Furnari's petition.

II.

A.

In a federal habeas corpus proceeding, this Court exercises plenary review of the district court's le gal conclusions. See Jones v. Lilly, 37 F.3d 964, 967 ( 3d Cir. 1994). However, a court's role in reviewing decisio ns by the Parole Commission on an application for a writ of h abeas corpus is limited. The appropriate standard of revi ew of the Commission's findings of fact "is not whether the [Commission's decision] is supported by the prepond erance of the evidence, or even by substantial evidence; t he inquiry is only whether there is a rational basis in the re cord for the [Commission's] conclusions embodied in its stat ement of reasons." Zannino v. Arnold, 531 F.2d 687, 691 ( 3d Cir. 1976); see also 28 C.F.R. S 2.18 ("The granting of parole to an eligible prisoner rests in the discretion of the United States Parole Commission."). This Court should revi ew, however, whether the Commission "has followed crite ria

7appropriate, rational and consistent" with its enab ling

statutes so that its "decision is not arbitrary and capricious, nor based on impermissible consideratio ns." Zannino, 531 F.2d at 690. To this end, "the Commiss ion may not base its judgment as to parole on an inaccu rate factual predicate." Campbell v. United States Parol e Comm'n, 704 F.2d 106, 109 (3d Cir. 1983) (citations omitted).

A parole hearing is not a trial-like adversarial pr oceeding. The prisoner may be represented at the initial hear ing by a person of his choice, see 28 C.F.R. S 2.13(b), but parole hearings are informal, and the rules of evidence do not apply, see Campbell v. United States Parole Comm'n, 704 F.2d 106, 109-10 (3d Cir. 1983) (noting that hearsa y evidence is admissible in a parole hearing). The Un ited States Attorney does not bear any burden of proof i n such proceeding, see 28 C.F.R. S 2.19(a)(4), (b)(1), and (d), but rather may provide relevant information to the Paro le Commission for its use in making the parole decisio n.

The Commission employs the preponderance of the evidence standard: "If the prisoner disputes the ac curacy of the information presented, the Commission shall res olve such dispute by the preponderance of the evidence standard; that is, the Commission shall rely upon s uch information only to the extent that it represents t he explanation of the facts that best accords with rea son and probability." 28 C.F.R. S 2.19(c). Under the parole regulations, a parole applicant is vicariously liab le for the
criminal activities of associates under the followi ng standard:

The prisoner is to be held accountable for h is own
actions and actions done in concert with oth ers; however, the prisoner is not to be held acco untable for activities committed by associates over whic h the prisoner has no control and could not have b een reasonably expected to foresee. However, if the prisoner has been convicted of a conspiracy, he must be held
accountable for the criminal activities comm itted by his co-conspirators, provided such activities we re committed in furtherance of the conspiracy a nd

8subsequent to the date the prisoner joined t he

conspiracy.

28 C.F.R. S 2.20, Chapt. 13, General Note 4.

Furnari argues that the Parole Commission violated its own procedures and the Due Process Clause of the Fi fth Amendment when it relied on the information provide d by Kelley in making its initial determination that Fur nari was responsible for murder. We do not reach Furnari's constitutional challenges to the initial parole det ermination, because we take judicial notice of Furnari's submis sion of
Stamboulidis's affidavit to the Parole Commission a t the interim hearing and the Commission's failure to pro vide Furnari a new statement of reasons despite the new information, and we conclude that the Commission fa iled to comport with 18 U.S.C. S 4206(b) and its regulation s at the interim hearing.

B.

Under the applicable Justice Department regulations , an interim hearing is not a de novo determination of t he prisoner's presumptive release date but a review of developments subsequent to the Commission's initial determination. See 28 C.F.R. S 2.14(a) ("The purpos e of an interim hearing required by 18 U.S.C. S 4208(h) sha ll be to consider any significant developments or changes in the prisoner's status that may have occurred subsequent to the initial hearing.").

The affidavit and the decision affirming the determ ination at the interim hearing are proper subjects for judi cial
notice. Federal Rule of Evidence 201 authorizes a c ourt to take judicial notice of an adjudicative fact if tha t fact is "not subject to reasonable dispute." FED. R. EVID. 201(b ); see also In re Indian Palms Associates, Ltd., 61 F.3d 1 97, 205 (3d Cir. 1995) ("Judicial notice may be taken at an y stage of the proceeding, including on appeal, as long as it is not unfair to a party to do so and does not undermine t he trial court's factfinding authority.") (citations omitted ). The government does not dispute that the affidavit was submitted to the Commission at the interim parole h earing,
and we notice it not for the truth of the statement s it

9contains, but simply for the purpose of determining that

new information regarding Casso's credibility was p resented to the Parole Commission at the interim hearing. Se e Indian Palms, 61 F.3d at 205 ("[I]t is not seriously quest ioned that the filing of documents in the case record provides competent evidence of certain facts--that a specifi c document was filed, that a party took a certain pos ition, that certain judicial findings, allegations, or adm issions were made.") (citations omitted). Similarly, it is proper for this Court to take judicial notice of decisions of an administrative agency, and the decision of the Appe als Board affirming the Parole Commission's decision at interim hearing is such a decision. See Checkosky v. SEC , 139 F.3d 221, 227 (D.C. Cir. 1998) (taking judicial notice o f administrative agency decision issued after the dec ision under review by the court); Opaka v. Immigration & Naturalization Serv., 94 F.3d 392, 395 (7th Cir. 19 96) (taking judicial notice of immigration service's de cision to suspend deportation to appellant-alien's wife).

Stambouldis's affidavit undeniably represents signi ficant information that, if the Parole Commission were to accept it, would be relevant to the question at the initia l hearing whether the Commission correctly determined that Fu rnari was responsible for murder. The Appeals Board's dec ision affirming the initial determination that Furnari wa s a Category Eight credited Casso's information. The Bo ard

stated that

the Parole Commission finds the information from the U.S. Attorney's Office on your personal resp onsibility for several of the murders (victims Schliefe r, Taglianetti, and DeCicco) and attempted murd er (victim Abinanti) to be credible and reliable, even though much of the information may have come from Anthon y Casso, one of the most violent members of your orga nization.

This portion of the Statement of Reasons makes clea r that the Commission relied in significant part on Casso' s information in its initial determination that Furna ri was a Category Eight.

The Commission's decision following the interim hea ring, however, does not mention the new information about

10Casso's credibility presented at the interim hearin g. The

Appeals Board's affirmance of the decision from the interim hearing states that "the evidence you have presente d does not persuade the Commission that the information it has relied upon is inaccurate." It is not possible to t ell from this
decision whether the Parole Commission continues to rely on Casso and find him credible, or has concluded th at there is sufficient additional information tying Fu rnari to murder to conclude that he is a Category Eight even absent the information provided by Casso.

The Commission is required, under 18 U.S.C. S 4206( b), to "state with particularity the reasons" for a den ial of parole. See also 28 C.F.R. S 2.13(c) ("At the concl usion of the hearing, the examiner shall discuss the decisio n to be recommended by the examiner, and the reasons theref or, except in the extraordinary circumstance of a compl ex issue that requires further deliberation before a recommendation can be made.") (emphasis added). As we have stated,

We do not find it either overly intrusive or contrary to the statute to require the Commission, which is under a statutory mandate to "state with particula rity the reasons for [parole] denial," to truly provi de reasons.
We believe that a statement of reasons must reveal reasoning, and not simply present conclusion s, at least where that reasoning is not apparent from th e facts of

the case.

Marshall v. Lansing, 839 F.2d 933, 942-43 (3d Cir. 1988). In Marshall, it was not clear from the Commission's
statement of reasons how the Parole Commission
determined the amount of cocaine to attribute to th e prisoner. See id. at 942. We noted that

Where reasoning beyond simple arithmetic or obvious inferences is required to draw the conclusio ns upon which the Commission relies, we see no reaso n why the formal statement of reasons should not p rovide the crucial missing logic. . . . In this case, a reasonably intelligent person who was familiar with the relevant
facts of the case and who had read the Commi ssion's perfunctory explanation would still not have

11understood how the Commission reached its

conclusion.

Id.

This principle extends to the explanation of action at an interim hearing where significant new information i s brought to the attention of the Parole Commission. 2 Section 2.14, which provides for an interim hearing, requir es that the interim hearing "shall be conducted by an exami ner pursuant to the procedures of S 2.13(b), (c), (e), and (f) . . . ." See 28 C.F.R. S 2.14(a)(1). The provisions referenced include the requirement in S 2.13(c) that the exami ner discuss "the decision" and "the reasons therefor." In a situation such as this, where the petitioner has pr esented significant new information to the Commission, the Commission's failure to consider it (or to provide a new statement of reasons for denying parole in light of the new information) is thus a violation of the statute and the regulations. The Commission is not an investigative agency. It reviews information furnished by other governmen t agencies. Thus the Commission may reopen a parole
decision for consideration of new information at an y time prior to a prisoner's release, even if the new info rmation was in existence, but was not considered, when the initial parole decision was made. See Bridge v. United Stat es Parole Comm'n, 981 F.2d 97, 104 (3d Cir. 1992) (cit ation omitted). It is our view that, when new information is significant enough to seriously undermine the basis for the initial determination, the Parole Commission must p rovide a proper statement of reasons when it denies parole following an interim hearing. It cannot continue to rely on
the statement of reasons from the initial determina tion, which no longer can suffice.

As in Marshall, it is not possible to tell how the Appeals Board reached its conclusion following the interim hearing.

___________________________________________________ ______________

2. 28 C.F.R. S 2.28(a) provides for the reopening o f cases in light of

"new information of substantial significance favorable t o the prisoner." The government has not argued that S 2.28(a) is the exc lusive method by which a prisoner can submit new information to the Parole Commission. Similarly, the government has not argued that the r equirement of a statement of reasons does not apply at the interim hearing.

12The government's own determination that Casso had l ied to

it about many matters calls into question whether t he
Parole Commission had a rational basis for its deci sion to
the extent that decision was based on information f rom Casso. Yet the Appeals Board's statement of reasons affirming the decision at the interim hearing does not explain why the Board continues to categorize Furna ri in Offense Category Eight.

The government tries to deal with the insufficiency of the Parole Commission's statement of reasons by detaili ng all
the information that did not come from Casso that w as in
front of the Parole Commission and tied Furnari to the murders. This information might well meet the stand ard of providing a rational basis on which to make the
classification. But "the statute does not authorize the Commission to develop its reasoning in proceedings before the district court, let alone the court of appeals. " Marshall, 839 F.2d at 943. In reviewing an administrative age ncy's decision, we do not seek out some hypothetical rati onal support for the agency's action. "A court must revi ew the agency's actual on-the-record reasoning process. On ly a formal statement of reasons from the agency can pro vide this explanation, not a post hoc rationalization, o r agency counsel's in-court reasoning." Id. at 943-44 (citin g Motor
Vehicle Mfrs. Assoc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50 (1983)). To the extent that we have, in prior cases, searched the record to find support for the Parole Commission's decision, we have done so only where"t he Commission's conclusions were [ ] readily apparent" or "the challenged decisions were based on characterization s by the Commission." Marshall, 839 F.2d at 944. Neither is the

case here.

C.

For the foregoing reasons, we conclude that the statement given by the Appeals Board is an insuffic ient statement of reasons for classifying Furnari as a C ategory Eight. The Parole Commission thus abused its discre tion at the interim hearing by failing to comply with 18 U. S.C. S 4206(b) and 28 C.F.R. SS 2.13 and 2.14, its own regulations requiring a statement of reasons for de nying

13parole. See Moret v. Karn, 746 F.2d 989, 992 (3d Ci r. 1984)

("An agency abuses its discretion if it fails to fo llow its own regulations and procedures."). Accordingly, the Dis trict Court's order denying the petition for habeas corpu s will be vacated, and the case remanded to the District Cour t with the direction that it enter a conditional order gra nting the petition and directing the Parole Commission to pro vide a new statement of reasons consistent with this opini on, within a period of time that the District Court sha ll fix. While it may be more efficient for the Commission t o simply afford Furnari a de novo hearing thereby obviating the necessity for other proceedings down the road, we l eave that decision to the Commission.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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