Court Opinion

ID: 3038888
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:59:36.021345+00
Date Added: 2024-06-11T11:48:51.083209
License: Public Domain

United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 04-2912
                                   ___________

United States of America,               *
                                        *
            Appellant,                  *
                                        * Appeal from the United States
      v.                                * District Court for the
                                        * Western District of Missouri.
Phillip O’Malley,                       *
                                        *
            Appellee.                   *
                                   ___________

                             Submitted: April 13, 2005
                                Filed: October 4, 2005
                                 ___________

Before COLLOTON, McMILLIAN, and BENTON, Circuit Judges.
                         ___________

COLLOTON, Circuit Judge.

       Phillip O’Malley was convicted of conspiracy to commit fraud. His sentence
required that he serve a term of probation, perform community service, pay a $10,000
fine, and make restitution in the amount of $459,047.02. On appeal by the
government, this court concluded that the district court erroneously calculated the
amount of loss and impermissibly departed from the then-mandatory guideline range.
United States v. O’Malley, 364 F.3d 974 (8th Cir. 2004). On remand, the district
court imposed the same sentence, and the government again appeals. We reverse and
remand again for resentencing.
                                          I.

       O’Malley’s conviction arose from a conspiracy to commit fraud in the sale of
chlorofluorocarbon gases, or freon. As the operator of several companies that sold
freon, O’Malley and two co-conspirators arranged to sell freon to a local Sam’s Club,
and then to re-purchase and re-sell some of the freon, at inflated prices. At the first
sentencing hearing, the district court found that the amount of financial loss to Sam’s
Club for purposes of the sentencing guidelines and restitution was $459,047.02. On
the first appeal, our court held that the loss amount should have included all of the
funds retained by all of the co-conspirators, and that the correct amount was
$756,460. O’Malley, 364 F.3d at 980.

       The district court also considered O’Malley’s offense to be “outside the
heartland” of offenses typically governed by the fraud guideline, so the court departed
downward from the applicable guideline range and sentenced O’Malley to three
years’ probation. In the district court’s view, O’Malley’s extraordinary restitution
efforts, the potential economic impact of his absence from the community, and the
overstated effect of his role in the offense under the guidelines warranted a downward
departure. On appeal, our court disagreed and held that a departure was not justified.
O’Malley, 364 F.3d at 980-83.

       At a resentencing hearing on July 8, 2004, the district court considered the
impact of the Supreme Court’s recent decision in Blakely v. Washington, 124 S. Ct.
2531 (2004), which held that under Washington’s determinate sentencing scheme, the
Sixth Amendment requires that a defendant’s sentence not be enhanced beyond the
sentence authorized by the verdict based on any fact not admitted by the defendant
or found by a jury. Id. at 2537. The court found that Blakely applied to O’Malley’s
case, and based on the fact that a jury had not made findings on certain sentencing
matters, the court sustained O’Malley’s objection to an enhancement for the amount
of loss and declined to impose an additional enhancement for more than minimal

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planning. See USSG § 2F1.1(b)(1), (2) (2000). The district court also adjusted
O’Malley’s offense level downward by three levels based on a finding of a mitigating
role in the offense. See USSG § 3B1.2(b). As a result, O’Malley’s new offense level
was three, and the guideline sentencing range was zero to six months’ imprisonment.
The court chose to impose the same sentence that it originally imposed, and O’Malley
was thus sentenced to three years’ probation and ordered to pay restitution in the
amount of $459,047.02 and a fine of $10,000.

       The government appeals, arguing that the district court erred in imposing a
sentence that contravened this court’s previous mandate, and in revisiting issues that
were uncontested at the original sentencing. In its brief, the government also argued
that Blakely does not apply to the United States Sentencing Guidelines and that the
district court erred in sentencing O’Malley as though the guidelines were
unconstitutional. Although our review of the government’s contention with respect
to Blakely is necessarily informed by the Supreme Court’s more recent decision in
United States v. Booker, 125 S. Ct. 738 (2005), we agree that the district court –
which also acted without the benefit of Booker – committed error in its most recent
sentencing of O’Malley, and we reverse and remand for resentencing.

                                         II.

       In Booker, the Supreme Court declared that mandatory application of the
United States Sentencing Guidelines violated the Sixth Amendment in certain cases,
and held as a remedy that the guidelines are “effectively advisory” in all cases. Id.
at 756-57. The district court must still “consult” the guidelines and “take them into
account” during sentencing, but it may vary from the guideline range based on factors
set forth in 18 U.S.C. § 3553(a). Id. at 767.

      In the government’s view, “retroactive application of Blakely” to O’Malley’s
case was inappropriate because Blakely was a “procedural rule which would not be

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applicable to cases no longer on appeal when it was decided.” (Appellant’s Br. at 6).
To whatever extent the government argues that we are bound to consider only pre-
Booker principles in reviewing the sentence imposed by the district court, we
disagree. The Supreme Court made clear in Booker that both its Sixth Amendment
holding and its remedial excision of the portion of the Sentencing Reform Act that
made the guidelines mandatory are now applicable “to all cases on direct review.”
125 S. Ct. at 769.

       We agree with the government, however, that the district court’s understanding
of the impact of Blakely on the federal guidelines was erroneous. The district court
declined to enhance O’Malley’s guideline offense level for the amount of loss, role
in the offense, and more than minimal planning, at least in part because the “jury was
not asked to make decisions” regarding those enhancements. (Resentencing Tr. at
16). The Supreme Court’s chosen remedy in Booker, however, was not to disallow
such enhancements altogether, but rather to treat the guidelines as advisory. Booker,
125 S. Ct. at 757. “[W]ith the mandatory use of the Guidelines excised, the
traditional authority of a sentencing judge to find all facts relevant to sentencing will
encounter no Sixth Amendment objection.” United States v. Haack, 403 F.3d 997,
1003 (8th Cir. 2005) (quoting United States v. Crosby, 397 F.3d 103, 112 (2d Cir.
2005)). Thus, for purposes of the now-advisory nature of the guidelines, “the
applicable Guidelines range is normally to be determined in the same manner as
before Booker/Fanfan.” Id.

       Under Booker, which of course was not available at the time of the hearing, the
district court should have calculated and considered the guideline range as it would
have done under the mandatory guidelines, and then considered that advisory range
together with the other factors in § 3553(a). Pursuant to our court’s prior decision,
the proper loss amount for purposes of the sentencing guideline on fraud is $756,460,
and the district court should apply this loss amount when calculating the proper
advisory guideline range.

                                          -4-
       The government also argues that the mandate required the district court to order
restitution in the amount of $756,460. The district court’s initial determination of the
loss amount applied to all relevant sentencing purposes, including restitution, 364
F.3d at 978, and the government appealed the amount of loss for purposes of both the
guidelines offense level and restitution. Our court’s opinion on the first appeal made
no distinction between the two loss amounts, and we read it to hold that the amount
of loss should be $756,460 for all relevant sentencing purposes, including restitution.
Determination of restitution is unaffected by Booker, United States v. Carruth, 418
F.3d 900, 904 (8th Cir. 2005), and the loss amount determined in the first appeal
should have governed the district court’s imposition of restitution at resentencing.
On remand, therefore, the district court should impose restitution in the amount of
$756,460.

       Finally, the government argues that the mandate rule precluded the district
court from considering a downward adjustment based on O’Malley’s role in the
offense. We disagree. The district court’s decision to consider O’Malley’s
potentially mitigating role is not inconsistent with our prior opinion, and therefore
does not violate the mandate rule. After finding that the district court had improperly
considered O’Malley’s role in the offense as the basis for a departure, we specifically
stated that “[u]pon review, we cannot say that O’Malley may not receive a downward
adjustment under USSG § 3B1.2 for his mitigating role; however, there is nothing so
unusual in the circumstances of the present case to warrant a downward departure on
that basis.” O’Malley, 364 F.3d at 983 (emphasis in original). Because the opinion
explicitly contemplated a possible adjustment for O’Malley’s role in the offense, the
district court’s subsequent reduction of the offense level based on this factor does not
violate the mandate.

      For the foregoing reasons, we vacate O’Malley’s sentence and remand for
resentencing consistent with this opinion. The district court should determine the
advisory guidelines sentencing range consistent with this opinion and our prior

                                          -5-
opinion, and then determine an appropriate sentence in light of Booker and 18 U.S.C.
§ 3553(a).
                       ______________________________

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