Source: https://law.justia.com/cases/federal/appellate-courts/F2/836/889/420207/
Timestamp: 2020-01-17 15:58:49
Document Index: 60954326

Matched Legal Cases: ['§ 3651', '§ 3579', '§ 3579', '§ 77', '§ 1341', '§ 77', '§ 401', '§ 401', '§ 3651', '§ 3651']

United States of America, Plaintiff-appellee, v. Gary Corn, Defendant-appellant, 836 F.2d 889 (5th Cir. 1988) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fifth Circuit › 1988 › United States of America, Plaintiff-appellee, v. Gary Corn, Defendant-appellant
United States of America, Plaintiff-appellee, v. Gary Corn, Defendant-appellant, 836 F.2d 889 (5th Cir. 1988)
US Court of Appeals for the Fifth Circuit - 836 F.2d 889 (5th Cir. 1988) Jan. 21, 1988
Corn pleaded guilty to criminal contempt for violating an injunction that prohibited illegal trading in securities. The district court sentenced him to serve five years in prison and to pay $6,045,527 restitution to the victims of the securities fraud. We find no merit in Corn's challenges to the injunction underlying the contempt conviction, but, because the district court did not advise Corn, as required by Federal Rule of Criminal Procedure 11(c) (1), that he might be ordered to pay restitution in consequence of his guilty plea, we remand to the district court with instructions either to allow withdrawal of his plea or to resentence Corn without ordering restitution. If after trial or re-pleading, Corn is again sentenced to pay restitution under the Victim and Witness Protection Act,1 the court may order compensation only for those losses resulting from offenses committed after the effective date of the statute.
Corn asserts that, if the injunction prohibits illegal trading in all securities, it amounts to nothing more than a vague order to obey the law. Federal Rule of Civil Procedure 65(d) provides: "Every order granting an injunction and every restraining order shall set forth the reasons for its issuance; shall be specific in its terms; [and] shall describe in reasonable detail ... the act or acts sought to be restrained." The purpose of the rule is to put the parties on fair notice of what they are forbidden to do.6 Thus, an injunction ordering a party to "obey the law" might well fail as overbroad. But the injunction issued in Hollensworth compelled more than mere obedience to the law; it set forth in specific terms the types of securities transactions proscribed. That the court incorporated into the injunction language from the securities laws does not make the injunction vague so long as the borrowed language "adequately describe [s] the impermissible conduct."7 We find the Hollensworth injunction both specific and clear, and nonetheless so because it adopts terms from the securities laws.8
The argument that Judge Sterling may not enforce Judge Seals's injunction also fails. Corn cites Waffenschmidt v. Mackay for the proposition that " [e]nforcement of an injunction through a contempt proceeding must occur in the issuing jurisdiction because contempt is an affront to the court issuing the order."14 This statement is true enough. The problem lies in Corn's attempt to equate the judge with the court. The Hollensworth injunction issued from the United States District Court for the Southern District of Texas and was not the personal command of Judge Seals, Judge Sterling, or any other judge on that court. "Each judge of a multi-district court has the same power and authority as each other judge."15 III.
Corn contends that the district court erred in accepting his guilty plea without admonishing him as required by Federal Rule of Criminal Procedure 11(c) (1). Rule 11(c) (1) provides:
Rule 11(c) (1), however, requires the court explicitly to inform the defendant, before accepting his guilty plea, that the court may order him to pay restitution to the victims of the crime. In commenting on the 1985 amendment to the rule, adding this requirement, the Advisory Committee states, " [b]ecause this restitution is deemed an aspect of the defendant's sentence, ... it is a matter about which a defendant tendering a plea of guilty or nolo contendere should be advised." The district court in this case made no mention of restitution until the sentencing hearing, more than two months after accepting the guilty plea. Corn pleaded guilty to the contempt charge, therefore, without any prior notice that he might be ordered to pay restitution. Under these circumstances, the district court erred in accepting his plea.
The Fourth Circuit as well as a district court in that circuit have vacated restitution orders or remanded for resentencing without restitution because the defendant pleaded without prior notice of the possibility of restitution;17 the Eighth and Ninth Circuits have done so because restitution was outside the scope of the plea agreement;18 and the Third, Seventh, and Ninth Circuits have affirmed guilty pleas and restitution orders only upon finding that the defendants had received notice of the possibility of restitution before finally entering their pleas.19 In all of these decisions but the Fourth Circuit decision in Hawthorne, the courts were reviewing guilty pleas entered before the August 1, 1985, effective date of the amendment to Rule 11(c) (1) requiring admonition as to restitution. If the unamended rule required notice, then, a fortiori, the amended rule requires notice.
Corn's challenge, moreover, involves a purely legal question which, if overlooked, would result in a miscarriage of justice.21 In United States v. Velasquez, this circuit applied this standard to review, for the first time on appeal, a defendant's claim that the district court had not complied at sentencing with the procedures mandated by Federal Rule of Criminal Procedure 32(c) (3) (D).22 Following Velasquez, we hold that whether the district court complied with the express provisions of Rule 11(c) (1) constitutes a purely legal question that must be answered in the negative on the undisputed facts in this record. To overlook the error would result in a miscarriage of justice by subjecting Corn to a sentence about which he was not adequately warned at the time of the plea.
An analogous argument is possible here: the court told Corn that it could sentence him however it saw fit; the plea agreement stated that the court could impose a fine in any amount. Yet we hold these general statements insufficient to have put Corn on notice that he might be ordered to pay more than $6,000,000 restitution. Indeed, the imposition of a restitution order in so large an amount, without explicit prior notice of the possibility of restitution, could scarcely be deemed either harmless or not to affect the defendant's substantial rights.27 Fentress, moreover, was sentenced before the effective date of the 1985 amendment to Rule 11(c) (1) which for the first time required explicit admonition about restitution.28
Courts considering the validity of guilty pleas entered without prior notice of the possibility of restitution have usually simply vacated the restitution order or permitted resentencing without the possibility of restitution.29 Most of these cases, however, involved restitution orders imposed as a condition of probation under 18 U.S.C. § 3651 rather than as an integral part of the sentence under 18 U.S.C. §§ 3579-3580, as in this case. Because the district court may have considered the restitution order essential to the sentence, we remand and give the district court the option either to resentence Corn without ordering him to pay restitution or to permit withdrawal of his guilty plea, allowing the government to re-prosecute him if it sees fit.30
We follow the rule of Oldaker and Martin, although we focus on the time at which the criminal acts were committed rather than on the time at which the losses occurred. Before the effective date of the Act, a court could order restitution only as a condition of probation.34 The Act "expand [ed] current law by authorizing an order of restitution independent of a condition of probation, thereby permitting its use in conjunction with imprisonment, fine, suspended sentence, or other sentence imposed by the court."35 Because the Act thus increased the punishment applicable to crimes like Corn's, the application of the statute to acts committed before its effective date raises a problem under the clause of the Constitution forbidding Congress to pass "ex post facto Law [s]."36 It is axiomatic that courts should interpret statutes so as to avoid conflict with the Constitution.37 We hold, therefore, that the Act permits a sentence requiring restitution only of losses resulting from criminal acts committed after January 1, 1983. When the defendant's offense is a unitary conspiracy or scheme to defraud, the government must identify which losses resulted from acts committed before and which from acts committed after the effective date for the purposes of restitution under the Victim and Witness Protection Act.
The key to resolving this issue is determining the date of Corn's offense, because the Act provides that it shall apply to "offenses occurring on or after January 1, 1983." Victim and Witness Protection Act of 1982, Pub. L. No. 97-291, Sec. 9(b) (2), 96 Stat. 1248, 1258 (1982) (emphasis added.)
18 U.S.C. §§ 3579-3580 (1982)
15 U.S.C. §§ 77a-78kk (1982); 17 C.F.R. 240.10b-5 (1987)
Securities and Exch. Comm'n v. Hollensworth, Civil Action No. H-77-1048 (S.D. Tex. 1977)
Matter of Baum, 606 F.2d 592, 593 (5th Cir. 1979); Sheila's Shine Products, Inc. v. Sheila Shine, Inc., 486 F.2d 114, 128-29 (5th Cir. 1973)
United States v. Miller, 588 F.2d 1256, 1261 (9th Cir. 1978), cert. denied, 440 U.S. 947, 99 S. Ct. 1426, 59 L. Ed. 2d 636 (1979)
See Securities and Exch. Comm'n v. Manor Nursing Centers, Inc., 458 F.2d 1082, 1103 (2d Cir. 1972); Williams v. United States, 402 F.2d 47 (10th Cir. 1967). See also the Hollensworth injunction appended to this opinion
Compare 18 U.S.C. §§ 1341, 1343 and 15 U.S.C. § 77q with 18 U.S.C. § 401
In re Debs, 158 U.S. 564, 15 S. Ct. 900, 909-11, 39 L. Ed. 1092 (1895); Miller, 588 F.2d at 1261
Albernaz v. United States, 450 U.S. 333, 344, 101 S. Ct. 1137, 1145, 67 L. Ed. 2d 275 (1981)
763 F.2d 711, 716 (5th Cir. 1985)
United States v. Martinez, 686 F.2d 334, 338 (5th Cir. 1982) (quoting United States v. Stone, 411 F.2d 597, 598 (5th Cir. 1969))
18 U.S.C. § 401 (1982)
United States v. Hawthorne, 806 F.2d 493, 497-501 (4th Cir. 1986); United States v. Lott, 630 F. Supp. 611, 612-13 (E.D. Va. 1986), aff'd, 795 F.2d 82 (4th Cir. 1986)
United States v. Whitney, 785 F.2d 824 (9th Cir. 1986); United States v. Runck, 601 F.2d 968, 969-70 (8th Cir. 1979), cert. denied, 444 U.S. 1015, 100 S. Ct. 665, 62 L. Ed. 2d 644 (1980); see also United States v. Garcia, 698 F.2d 31, 35-37 (1st Cir. 1983)
United States v. Grewal, 825 F.2d 220, 222 (9th Cir. 1987); United States v. Mischler, 787 F.2d 240, 244 (7th Cir. 1986); United States v. Woods, 775 F.2d 82, 85-87 (3d Cir. 1985)
United States v. House, 808 F.2d 508, 512 (7th Cir. 1986)
United States v. Velasquez, 748 F.2d 972, 973 (5th Cir. 1984); Nissho-Iwai Co. v. Occidental Crude Sales, Inc., 729 F.2d 1530, 1549 (5th Cir. 1984)
792 F.2d 461, 465 (4th Cir. 1986)
Fed. R. Crim. P. 11(h) provides: "Any variance from the procedures required by this rule which does not affect substantial rights shall be disregarded."
See 18 U.S.C. § 3651
See Hawthorne, 806 F.2d at 498; Runck, 601 F.2d at 970; Lott, 630 F. Supp. at 613
United States v. Purther, 823 F.2d 965, 968 (6th Cir. 1987); United States v. Barnette, 800 F.2d 1558, 1571 (11th Cir. 1986), cert. denied, --- U.S. ----, 107 S. Ct. 1578, 94 L. Ed. 2d 769 (1987)
United States v. Oldaker, 823 F.2d 778, 781-82 (4th Cir. 1987); United States v. Martin, 788 F.2d 184, 188-89 (3d Cir. 1986)
18 U.S.C. § 3651 (1982)
36 U.S. Const. art. I, Sec. 9, cl. 3. See also Miller v. Florida, --- U.S. ----, 107 S. Ct. 2446, 2450-53, 96 L. Ed. 2d 351 (1987).
Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 346-48, 56 S. Ct. 466, 482-84, 80 L. Ed. 688 (1936) (Brandeis, J., concurring)
United States v. Oldaker, 823 F.2d 778, 781-82 (4th Cir. 1987); United States v. Martin, 788 F.2d 184, 188-89 (3d Cir. 1986); United States v. Purther, 823 F.2d 965, 968 (6th Cir. 1987); United States v. Barnette, 800 F.2d 1558, 1571 (11th Cir. 1986), cert. denied, --- U.S. ----, 107 S. Ct. 1578, 94 L. Ed. 2d 769 (1987)