Playing with post-Booker fire: the dangers of increased judicial discretion in federal white collar sentencing.

• Author: Chatham, Daniel A.

1. INTRODUCTION II. BACKGROUND A. History of the United States Sentencing Guidelines B. Mandatory Minimum Sentences in the Federal System C. Impact of Blakely and Booker Generally D. The Impact of Booker on White Collar Crime Sentencing E. The Recent High-Profile White Collar Crime Boom 1. Martha Stewart 2. HealthSouth F. Game Theory Principles III. THE POST-BOOKER GAME A. Applying Game Theory to Post-Booker White Collar Sentencing and the Congressional Response B. Explaining Results Outside the Scope of the Game IV. RECOMMENDATION V. CONCLUSION I. INTRODUCTION

   Federal criminal sentencing is currently at a crossroads. Following the Supreme Court's decision to render the federal sentencing guidelines merely advisory rather than mandatory in United States v. Booker, (1) sentencing reform is once again a possibility. This reform will most likely come in areas of great sentencing disparity or where the public and Congress feel offenders are not punished harshly enough. This Note analyzes, in game theory terms, (2) the possibility of federal sentencing reform in white collar crime cases, specifically, the imposition of mandatory minimums for certain corporate crimes.

   This Note first discusses the implementation of mandatory sentencing guidelines, abolishment of parole, and popularity of federal mandatory minimum sentences as a response to growing public concern over sentencing disparity and the perception that violent criminals and drug criminals were not punished harshly enough or uniformly. Part II also discusses the recent increase in high profile corporate crime and the subsequent government crackdown on those offenses and draws parallels between the current white collar crime atmosphere and the "war on drugs" of the 1980s. Part III applies a two-period model of game theory to analyze the possibility of Congress imposing mandatory minimum sentences for white collar criminals to compensate for increasing sentencing disparity and the return to low sentences for corporate criminals. In one outcome of the "game," the increased judicial discretion following the Booker decision leads to reduced white collar sentences, provoking Congress to respond by passing mandatory minimum laws. In another outcome, judges forego using their increased discretion to decrease white collar sentences except in extreme cases, essentially leaving the guideline system in place, and Congress declines the option to impose mandatory minimum sentences for white collar crimes.

   This Note recommends that federal judges opposed to sentencing guidelines should not use their newfound Booker discretion to give drastically greater sentencing departures or lower, non-guidelines sentences in non-extraordinary cases. This Note recommends this approach for two primary reasons. First, appellate courts have frequently remanded cases in which district courts have given huge departures in "non-extraordinary" cases for resentencing. (3) Thus, the district court eventually, though begrudgingly, must sentence a defendant to somewhere within or significantly closer to the guideline range in order to survive "reasonableness" review. (4) Second, by routinely departing downward or giving non-guidelines sentences in white collar cases, judges run the very real risk of provoking a response from Congress in the form of mandatory minimum sentences for white collar crimes, which would further decrease judicial sentencing discretion. Instead, this Note recommends that the best way for federal judges to keep the increased discretion offered by an advisory guideline regime is to exercise that discretion sparingly, making sure to cite specific reasons for exercising that discretion when it is employed.

2. BACKGROUND

   1. History of the United States Sentencing Guidelines

      Until the passage of the Sentencing Reform Act (SRA) in 1984, federal judges had relatively wide discretion in sentencing federal offenders up to the statutory maximum. (5)

      This judicial discretion led to disparity in the sentences of similarly situated offenders, a problem decried by both Democrats and Republicans in Congress, particularly in white collar cases where defendants typically received probation or a fine. (6) In the decade prior to 1984, Congress considered several proposals for sentencing reform, including some that proposed advisory guideline systems to be considered by sentencing judges as merely one sentencing factor. (7) In 1984, Congress passed the SRA as part of the Comprehensive Crime Control Act. (8) The SRA created an independent judicial agency, the United States Sentencing Commission, to promulgate and oversee the new federal sentencing guidelines. (9)

      The sentencing guidelines established by the Commission are designed to: [(1)] incorporate the purposes of sentencing (i.e., just punishment, deterrence, incapacitation, and rehabilitation); [(2)] provide certainty and fairness in meeting the purposes of sentencing by avoiding unwarranted disparity among offenders with similar characteristics convicted of similar criminal conduct, while permitting sufficient judicial flexibility to take into account relevant aggravating and mitigating factors; [(3)] reflect, to the extent practicable, advancement in the knowledge of human behavior as it relates to the criminal justice process. (10) The SRA also abolished the indeterminate sentencing system as well as federal parole, "eliminat[ing] the need for federal judges to [predict] future actions of the Parole Commission." (11) Among the principal targets for more serious penalties under the new guideline system were white collar and violent repeat offenders. (12) One important feature of the guidelines system adopted by Congress was its mandatory nature, which decreased and structured the judiciary's discretion within bounds set by Congress. (13) The first United States Sentencing Guidelines went into effect November 1, 1987. (14)

      The two main components of the federal guidelines were the seriousness of the offense and the defendant's criminal history. (15) In applying the guidelines in each case, the sentencing court first determined the appropriate base offense level for the offense of conviction under Chapter Two (Offense Conduct). (16) The court then made any adjustments to that level as warranted by factors detailed in Chapters Two and Three (Adjustments). (17) Next, the court determined the defendant's criminal history category under Chapter Four (Criminal History and Criminal Livelihood). (18) Based on the total calculated offense level after adjustments and the criminal history category, the court determined the corresponding guideline range on the guideline range chart listed in Part A in Chapter Five. (19) If, after determining the applicable guideline range, the court believed that range did not adequately reflect the proper punishment for the specific defendant, the court could depart upward or downward from the guideline range only for reasons listed in Chapter Five, Section K. (20) The court then determined where within the guideline range to sentence the defendant. However, if the guideline range determined by the court was lower than the mandatory minimum or higher than the statutory maximum, the statutorily authorized maximum or minimum sentence was the guideline sentence. (21)

      While the sentencing guidelines were a major revision to the federal criminal system in the 1980s, they were only a part of the federal sentencing overhaul. Around the same time Congress passed and the Sentencing Commission implemented the Guidelines, Congress began passing mandatory minimum sentence laws for certain violent and drug offenses. (22) The next Part discusses federal mandatory minimum sentences and their interaction with the United States Sentencing Guidelines.

   2. Mandatory Minimum Sentences in the Federal System

      Mandatory minimum sentences have a long history in federal sentencing law, though until the 1980s mandatory minimum sentences were quite low and typically aimed at specific crimes, rather than an entire class of offenses. (23) The move for sentencing reform in Congress coincided with the 1980s public outcry over drug crimes and the "war on drugs." (24) In response to this outcry, Congress passed several bills implementing mandatory minimum sentences for drug and violent crimes, and proposed many others, including mandatory minimums for some white collar offenses. (25) Many federal judges abhorred the new strictures on their sentencing discretion and expressed outrage with the Guidelines and mandatory minimum scheme. (26) There is little to suggest that federal judges' attitudes have changed toward the Guidelines in the ensuing years. (27) The next Part discusses various attempts to return some sentencing discretion to judges through attacks on the constitutionality of the Guidelines.

   3. Impact of Blakely and Booker Generally

      The constitutionality of the SRA has been challenged several times since its passage in 1984. (28) The first major challenge came in Mistretta v. United States, (29) when the Supreme Court upheld the constitutionality of the Commission against a challenge on the basis of excessive legislative delegation and violation of separation of powers. In 2000, however, the Supreme Court held in Apprendi v. New Jersey (30) that, "[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt." (31) Because Apprendi involved the New Jersey state sentencing guidelines, the Court, of course, did not speak directly to the federal sentencing guidelines in that opinion. But the parallels between the federal guidelines and the New Jersey guidelines caused many to believe that the decision could lead to the federal sentencing guidelines being declared unconstitutional. (32) The Supreme Court, however, declined to extend Apprendi until 2004 in Blakely v. Washington. (33)

      In June 2004, the...