Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
1-10-2008
USA v. Schwartz
Precedential or Non-Precedential: Precedential
Docket No. 05-4978
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 05-4978
____________
UNITED STATES OF AMERICA
v.
JOSEPH SCHWARTZ,
Appellant
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 05-cr-0091)
District Judge: Honorable James T. Giles
____________
Argued October 25, 2007
Before: SLOVITER, CHAGARES and
HARDIMAN, Circuit Judges.
(Filed: January 10, 2008)
Robert A. Zauzmer (Argued)
Karen L. Grigsby
Thomas P. Hogan, Jr.
Office of the United States Attorney
615 Chestnut Street
Suite 1250
Philadelphia, PA 19106
Attorneys for Appellee
Jeffrey M. Lindy (Argued)
Lindy & Associates
1800 John F. Kennedy Boulevard
Suite 1500
Philadelphia, PA 19103
Attorneys for Appellant
____________
OPINION OF THE COURT
____________
HARDIMAN, Circuit Judge.
Defendant Joseph Schwartz appeals from a judgment of
sentence imposed after he entered into a written plea agreement
(Agreement). The gravamen of Schwartz’s appeal is that the
government breached the Agreement and acted in bad faith
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when it withdrew its previously-filed motion for downward
departure pursuant to § 5K1.1 of the United States Sentencing
Guidelines.
I.
After Schwartz was arrested in September 2004 for
distributing crystal methamphetamine, he agreed to cooperate
with law enforcement and did so for nine months. On February
15, 2005, the government filed a one-count information
charging Schwartz with conspiracy to distribute more than 50
grams of methamphetamine in violation of 21 U.S.C.
§ 841(a)(1). Schwartz later pleaded guilty to the charge
pursuant to the Agreement in which the government agreed to
file a downward departure motion at sentencing in exchange for
Schwartz’s cooperation as outlined therein.
Before he was sentenced, Schwartz violated his bail
conditions by failing to report as directed by Pretrial Services
and by testing positive for illicit drugs. Accordingly, bail
revocation hearings were held on January 20, 2005, and April 8,
2005. Because of Schwartz’s ongoing cooperation, however,
the government opposed Pretrial Services’ requests to revoke
Schwartz’s bail. Although the magistrate judge decided not to
revoke bail, he warned Schwartz of the ramifications of any
further violations and modified the conditions of his release.
Despite two admonitions from the District Court,
Schwartz’s violations continued. On July 27, 2005, Pretrial
Services submitted a memorandum outlining Schwartz’s latest
violations and requesting a third bail revocation hearing.
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Pretrial Services noted that Schwartz had again tested positive
for methamphetamine on July 8, 2005, and had failed to report
as directed twice thereafter.
On August 11, 2005, one week prior to sentencing, the
government filed a downward departure motion pursuant to
Guidelines § 5K1.1 and 18 U.S.C. § 3553(e). That same day, in
response to Pretrial Services’ prior request, the District Court
issued a bench warrant for Schwartz’s arrest. The next day,
DEA agents arrested Schwartz at his residence, and seized a pill
bottle containing approxim ately $4500 w orth of
methamphetamine, numerous clear plastic bags, and a triple
beam scale. Four days later, the government filed a
supplemental sentencing memorandum and moved to withdraw
its motion for downward departure.
In light of all that transpired, the District Court revoked
Schwartz’s bail on August 18, 2005 and continued the
sentencing hearing until November 1, 2005. At the sentencing
hearing, the District Court granted the government’s motion to
withdraw its departure motion and sentenced Schwartz to the
statutory mandatory minimum term of 240 months
imprisonment, eight years of supervised release, a $500 fine, and
a $100 special assessment. Schwartz filed a timely appeal and
the government moved to dismiss in reliance upon his appellate
waiver in the Agreement.
II.
Schwartz claims that he is not bound by his appellate
waiver because the government breached the Agreement when
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it moved to withdraw its downward departure motion. Schwartz
argues that the government had no right to do so because
Paragraph 4(k) of the Agreement states the government’s
options upon discovery of additional criminal activity, and
withdrawal of the downward departure motion is not among
them.1
A defendant’s appellate waiver is not enforceable if the
government breaches its own obligations under a plea
agreement. See United States v. Moscahlaidis, 868 F.2d 1357,
1360 (3d Cir. 1989). Whether the government breached the
Agreement is a question of law subject to plenary review.
United States v. Rivera, 357 F.3d 290, 293-94 (3d Cir. 2004).
We are mindful of the government’s “tremendous bargaining
power” and “strictly construe the text [of the Agreement]
against [the government].” United States v. Baird, 218 F.3d
221, 229 (3d Cir. 2000). We have also recognized the “widely
agreed-upon notion that plea agreements must be construed
according to the general principles of contract law.” McKeever
v. Warden SCI-Graterford, 486 F.3d 81, 95-96 (3d Cir. 2007)
(citing United States v. Gebbie, 294 F.3d 540, 551 (3d Cir.
1
Paragraph 4(k) states that in the event of new criminal
activity Schwartz is subject to: (1) prosecution for the new
offenses; (2) reinstatement of any charges which may have been
dismissed in consideration of the plea; (3) refusal to file a
downward departure motion; (4) relief from any obligation
contained in the Agreement to recommend a particular sentence;
and (5) relief from any obligation contained in the Agreement to
enter into any stipulations regarding the Sentencing Guidelines.
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2002)). These principles include, of course, that “[a] writing
must be interpreted as a whole and no part should be ignored.”
C ALAMARI & P ERILLO, C ONTRACTS § 3.13 (5th ed. 2003), see
also F ARNSWORTH ON C ONTRACTS § 7.10 (4th ed. 2004).
Although we agree with Schwartz that his appellate
waiver does not foreclose his claim that the government
breached the Agreement, we disagree with Schwartz’s argument
on the merits. Schwartz’s argument is logical as far as it goes,
but we find it unpersuasive because it disregards several other
provisions of the Agreement. First, we note that the entire
Agreement was predicated upon Schwartz’s continued
cooperation and “it is a condition and obligation of this
cooperation agreement that the defendant not commit any
additional crimes after the date of this agreement.” Agreement
¶ 4(j). The Agreement also provides in Paragraph 4(i) that “if in
the government’s sole discretion the defendant fails to cooperate
. . . the government may withdraw any departure motion filed
under U.S.S.G. § 5K1.1, 18 U.S.C. § 3553(e), and/or Rule 35.”
The foregoing provision distinguishes Schwartz’s case from
United States v. Padilla, 186 F.3d 136 (2d Cir. 1999), on which
he relies.
In Padilla, the plea agreement did not state that the
government reserved the right to withdraw its motion for
downward departure. Id. at 141 (agreement “failed to enumerate
specifically the right to withdraw the motion”). Unlike Padilla,
here the Agreement reserved to the government several remedies
if Schwartz failed to cooperate, including: “the government may
withdraw any departure motion filed under U.S.S.G. § 5K1.1
. . . .” Agreement at ¶ 4(i). Moreover, as noted above,
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paragraph 4(j) states: “Defendant understands that it is a
condition and obligation of this cooperation agreement that the
defendant not commit any additional crimes after the date of this
agreement.” Therefore, Padilla does not support Schwartz’s
argument because the Second Circuit’s opinion adverted to the
absence of the very language found in Schwartz’s Agreement.
Id. at 142.
Although Padilla is unavailing to Schwartz, we note that
his argument finds support in a decision of the Court of Appeals
for the Eighth Circuit. See United States v. Anzalone, 148 F.3d
940, reh’g en banc granted, opinion vacated, 148 F.3d 940,
opinion reinstated, reh’g en banc denied, 161 F.3d 1125 (8th
Cir. 1998). Anzalone held, on facts similar to those presented
here, that the government could not refuse to file a motion for
downward departure for reasons unrelated to the defendant’s
cooperation. Id. at 941. Although Anzalone apparently used
illegal drugs in violation of his plea agreement, the Eighth
Circuit ruled that the government was required to file the motion
for downward departure, and then bring Anzalone’s criminal
conduct to the court’s attention at sentencing. Id. at 941-42.
Judge Murphy dissented, citing language from the plea
agreement strikingly similar to the language of Schwartz’s
Agreement, which led her to conclude that the government
complied with its obligations under the plea agreement. Id. at
942-43. Significantly, we cited Judge Murphy’s dissent with
approval in United States v. Abuhouran, 161 F.3d 206, 214 n.7
(3d Cir. 1998) (finding the majority’s reasoning in Anzalone
“not entirely convincing”). Since then, both the Fourth and
Eleventh Circuits have disapproved of Anzalone. See United
States v. Butler, 272 F.3d 683 (4th Cir. 2001); United States v.
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Nealy, 232 F.3d 825 (11th Cir. 2000). We too find Anzalone
unpersuasive and decline to follow it.
In sum, notwithstanding that withdrawal of the
downward departure motion was not among the remedies
enumerated in Paragraph 4(k) of the Agreement, Schwartz’s
drug trafficking activities were further crimes constituting lack
of cooperation pursuant to Paragraph 4(j) that authorized the
government to withdraw its motion under Paragraph 4(+i).
Accordingly, we hold that the government may withdraw a
downward departure motion when a defendant agrees not to
violate the law and the written plea agreement reserves to the
government the right to withdraw the motion upon that
occurrence.
III.
Schwartz next argues that the government acted in bad
faith because it knew or should have known of his drug use
while he was cooperating. Because of his consistently positive
drug tests, his lack of employment or income, and his
cooperation with authorities causing continued association with
drug users, Schwartz claims that the government knew or should
have known that he was selling enough methamphetamine to
support his own habit. Thus, Schwartz argues that the
government’s “purported” reasons for withdrawal of the
downward departure motion were “bad faith pretexts.”
We find Schwartz’s argument unpersuasive for two
reasons. First, he understates the level of his ongoing drug
dealing. DEA agents confiscated at Schwartz’s residence drug
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packaging paraphernalia and approximately $4500 worth of
methamphetamine — amounting to the equivalent of about 90
doses — putting the lie to his argument that he was selling small
amounts to sustain his habit. Second, we reject Schwartz’s
attempt to hold the government responsible for his inability to
cease criminal activity. As the District Court noted, this theory
ignores the fact that the Agreement required Schwartz to follow
the law. The government bears no more responsibility for
Schwartz’s criminal conduct after he signed the Agreement than
it did before he was arrested.
Based on the terms of the Agreement and the evidence
establishing Schwartz’s drug trafficking activity, we hold that
the government neither breached the Agreement nor acted in bad
faith when it sought to withdraw the downward departure
motion.
For the foregoing reasons, we will affirm the judgment
of the District Court.
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