United States v. Whitehead

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,  No. 05-50458
Plaintiff-Appellant, D.C. No.
v.  CR-03-00053-
THOMAS MICHAEL WHITEHEAD, CAS-1
Defendant-Appellee.


UNITED STATES OF AMERICA,  No. 05-50506
Plaintiff-Appellee, D.C. No.
v.  CR-03-00053-
THOMAS MICHAEL WHITEHEAD, CAS-1
Defendant-Appellant.
 ORDER

Filed March 11, 2009

Before: Alex Kozinski, Chief Judge,
Diarmuid F. O’Scannlain and Jay S. Bybee, Circuit Judges.

Order;
Dissent by Judge Gould;
Dissent by Judge Reinhardt

ORDER

A majority of eligible judges has voted against rehearing en
banc. The petition for rehearing and rehearing en banc is
denied. Fed. R. App. P. 35, 40.

3125
3126 UNITED STATES v. WHITEHEAD
GOULD, Circuit Judge with whom KLEINFELD, BYBEE,
CALLAHAN, and BEA Circuit Judges, join dissenting from
the denial of rehearing en banc:

I respectfully dissent from the denial of rehearing en banc
in this case.

The problem is simply that the desirable principle of defer-
ence to the sentencing judge, if taken too far, is transformed
into an undesirable principle of no review in effect for sub-
stantive reasonableness of a sentence, contrary to what the
Supreme Court declared as law. I believe that while Gall v.
United States, 128 S. Ct. 586 (2007) reinforced district
judges’ considerable discretion in sentencing, it left appellate
judges with the task of reviewing sentences for reasonable-
ness, and that review must be more than the mere recitation
that the district court knows the facts better than we do, with
a citation to Gall. See United States v. Whitehead, 532 F.3d
991, 993 (9th Cir. 2008).

The scope of our duty to review a district court’s sentenc-
ing decision for substantive reasonableness under an abuse of
discretion standard goes beyond what our court did here, and
we would all benefit if we had a better standard for such cir-
cumstances. Thomas Whitehead, the defendant in this case,
pirated a million dollars worth of “access cards” and sold
them to persons who used them to steal DirectTV’s television
services. He personally garnered more than $400,000 from his
involvement in this illegal scheme. Yet despite this serious
crime, he got zero jail time. After taking his personal circum-
stances into account and granting him acceptance of responsi-
bility, even though he went to trial and did not save the
government time by pleading guilty, the district judge calcu-
lated his guideline range at 33 to 41 months. Nonetheless, the
judge sentenced him only to probation, restitution, and com-
munity service with no prison term, not a month, not even a
day. The sentencing judge gave the following reasons: White-
head displayed extreme remorse (which, I observe, was
 UNITED STATES v. WHITEHEAD 3127
expressed after his conviction). Whitehead had family circum-
stances that the district court thought warranted leniency, spe-
cifically his mother’s illness and his position as a parent with
joint custody of his daughter. And the district court concluded
that there was a low likelihood of recidivism. Whitehead, 532
F.3d at 99799. The Whitehead per curiam majority was com-
fortable affirming the sentence rather summarily and hardly
needed to justify its affirmance with any analysis of the dis-
trict court’s reasons.

In Gall v. United States, the Supreme Court upheld a 36
month probationary sentence as reasonable when the applica-
ble guideline range was a 30 to 37 month custodial sentence.
Gall, 128 S. Ct. 586. The extent of the variance in Gall was
substantially the same as in Whitehead, but the Supreme
Court’s reasoning and review of the record was significantly
more thorough than in Whitehead. In Gall, the Supreme Court
exhaustively detailed the compelling mitigating evidence of
Gall’s voluntary withdrawal from a conspiracy to distribute
ecstacy and self-motivated rehabilitation—mitigation substan-
tially more compelling than Whitehead’s mitigation case.
Whitehead cites Gall, but it does not engage in the same sort
of review. The signal fact is that Whitehead expressed
remorse after his conviction. And, of course, he also had
some family obligations, but who doesn’t? How do the factors
of post-conviction remorse and some family make his case
much different from all of the routine convictions where crim-
inal defendants are unhappy that they were caught and con-
victed and also have fathers, mothers, spouses, or children?
How do these mitigating factors warrant such a significant
variance? It’s hard to believe that the Sentencing Commission
was unaware of such circumstances in the mass of cases they
reviewed. It looks as if district courts can give a mere wrist-
slap to those convicted of white collar crime, and then await
a summary affirmance from our court.

However, it has been recognized for more than two thou-
sand years that: “to spare the guilty is to injure the innocent.”
3128 UNITED STATES v. WHITEHEAD
Publius Syrus, Moral Sayings 113 (D. Lyman trans. 1856).
Many of those now concerned with victims’ rights have rec-
ognized the same thing. See, e.g., Crime Victims’ Rights Act,
18 U.S.C. § 3771 (2006). Doubtless the district court thought
it was sentencing in a just way, and doubtless the Whitehead
panel majority also thinks it serves justice to affirm. None
would dispute the importance of reaching a just result sen-
tence for crime in our criminal justice system. As was well
stated by no less a legal luminary than Daniel Webster, at the
funeral of Mr. Justice Story, on September 12, 1845: “Justice
is the great interest of man on earth. It is the ligament which
holds civilized beings and civilized nations together.” 2
Papers of Daniel Webster: Legal Papers, 695 (Andrew J.
King, ed. 1989). We can accept that the Whitehead panel
majority and the sentencing district court think Whitehead’s
sentence was just. But just as surely I conclude that it is unjust
for a person who stole so much money to get no jail time.
What is needed is some better standard by which in white col-
lar crime cases, where physical injury to the public from the
defendant is probably not in the cards, to assess what is an
appropriate level of punishment. I do not think it is sufficient
merely to defer to district court discretion with unbounded
standards.

The Whitehead majority concludes that “the district court
was ‘in a superior position’ to find the relevant facts and to
‘judge their import.’ [It] didn’t abuse its discretion in so
doing.” Whitehead, 532 F.3d at 993. Surely it is true that the
district court is in a better spot than we normally to consider
the facts of a case and to render sentence. Nonetheless, we
should provide some standard that would alert a district court
to the concern that it should go only so far but not farther. To
review for substantive reasonableness in such an undemand-
ing manner, as was undertaken by the per curiam majority in
Whitehead, undermines the equality goal envisioned by the
Guidelines, and embraced by the Court in the remedy portion
of Booker. United States v. Booker, 543 U.S. 220, 250-51,
261-63 (2005).
 UNITED STATES v. WHITEHEAD 3129
I share Judge Bybee’s valid concern that Whitehead will
become the “baseline” that we use to measure other sentences.
Whitehead, 532 F.3d at 999. Indeed, it already has. In United
States v. Ruff, a panel majority, over my dissent, upheld a
one-day custodial sentence, a significant variance from a
guideline range of 30 to 37 months, citing the archetype of
permissiveness, Whitehead. Ruff, 535 F.3d at 1002. In that
case, Kevin Ruff had stolen more than $600,000 worth of sup-
plies from the Sacred Heart Medical Center and then covered
his tracks by entering more than one thousand false down-
ward inventory adjustments in the medical center’s computer-
ized log. The district court in Ruff cited Ruff’s history of
employment; his cooperation and remorse; his family support;
the absence of risk to the public and the appropriateness of
restitution; as well as his mental health issues and gambling
addiction for the reasons to vary downward. 535 F.3d at 1001.
Again, are these mitigating factors that justify such a lenient
sentence?

I ask: Given that Whitehead took more than $1 million and
profited by some $400,000, in a calculated fraud, is no jail
time warranted? Given that Ruff took more than $600,000 in
a calculated fraud, over several years, is spending one day in
jail enough? Doubtless our society has a hard time paying for
all those imprisoned and doubtless those who aren’t impris-
oned might have a better chance at generating income to pay
victim restitution, but those are not sufficient reasons to
rubber-stamp leniency for criminals who are better placed in
society than the run-of-the-mill criminals who get a worse
deal from the sentencing judges.

This case puts the Ninth Circuit in what I consider to be a
conflict with several of our sister circuits who have adopted
a more vigorous approach to reviewing sentences for reason-
ableness. So far as I have been able to determine, the Ninth
Circuit has never found a sentence substantively unreasonable
after Gall in a published opinion. But some other circuits in
white collar crime cases have concluded after Gall that sen-
3130 UNITED STATES v. WHITEHEAD
tences were unreasonable when they contained significant
downward variances. See, e.g., United States v. Omole, 523
F.3d 691 (7th Cir. 2008) (reversing a 12 month custodial sen-
tence for a defendant convicted of wire fraud when the guide-
line range was 87-102 months, and the sentencing judge’s
explanation did not support a sentence so far below the
range); United States v. Hunt, 521 F.3d 636 (6th Cir. 2008)
(reversing a probationary sentence for health care fraud where
the Guideline range was 27-33 months).

To give such light sentences for such serious crime is an
affront to the premises of our criminal law system which rely
in part on punishment serving some purpose of general deter-
rent. Needless to say, the victims of these crimes could hardly
be expected uniformly to endorse a lack of incarceration.
Indeed, the Sentencing Commission, with its mandate from
Congress to foster uniformity and proportionality in sentenc-
ing, has expressed concern that before the Guidelines, “courts
sentence[d] to probation an inappropriately high percentage of
offenders guilty of certain economic crimes, such as theft, tax
evasion, antitrust offenses, insider trading, fraud, and embez-
zlement . . . .” U.S.S.G. § 1A1.1, Ch. 1, Pt. A.4(d) (2006).
Regrettably, Whitehead signals that we are returning to that
era of inappropriate sentences. Wilful offenders who commit
white collar crime, who steal intentionally hundreds of thou-
sands or even millions of dollars, should receive some degree
of forced incarceration. We know that often the poor and
powerless criminal defendants who commit common larceny
or theft will serve some hard time. The public, respecting our
legal system, may find it difficult to believe that our abuse of
discretion review with deference to trial court sentencing per-
mits us to conclude that persons who steal hundreds of thou-
sands of dollars in intentional schemes over long periods of
time will suffer little or no prison time.

I do not mean to sound harsh toward the criminal defen-
dants in white collar crime cases or to our district courts giv-
ing light sentences in such cases or to our panels that might
 UNITED STATES v. WHITEHEAD 3131
be inclined to affirm them under the panel’s view of Gall, but
the reasons cited by the sentencing judges in Whitehead and
Ruff will exist in most white collar criminal cases. We can
hardly be surprised if criminals express remorse after they are
caught and are facing the consequences. We can hardly be
surprised if a white collar criminal has a good employment
history—otherwise, he or she would likely not be in a position
to commit the crime. Possibly for that reason, as I mentioned
in my Ruff dissent, “district courts sentencing white collar
criminals can more often identify with the criminal . . . . But,
socioeconomic comfort with a criminal convict is not a suffi-
cient reason to show extreme leniency . . . .” Ruff, 535 F.3d
at 1007 (Gould, J., dissenting).

Many judges will naturally hesitate to step forward with
views that might be characterized as being less than merciful
to a criminal defendant.1 I, for one, would not quarrel with
any reasonable variance from the advisory guidelines, and
disposition towards mercy alone might be enough. But there
have to be some limits and for me these limits are transcended
when persons who orchestrate massive white collar crimes are
given no or virtually no jail time.

If a district court in the Ninth Circuit need only cite one or
two of these predictable reasons to allow a white collar crimi-
nal to forgo jail time, these white collar criminals generally
won’t have much jail time. Under 18 U.S.C. § 3553(a), we
should be upholding sentences that will reflect the seriousness
of the offense, afford adequate deterrence and protect the pub-
lic. We should not, by inaction and excessive deference, be
inviting people to open up shop scamming law-abiding indi-
viduals or corporations out of hundreds of thousands or even
millions of dollars, and then accepting that if on conviction
1
We have it on the good authority of Cicero: “Nothing is more praise-
worthy and nothing more befitting a great and eminent [person] than pla-
cability and clemency.” Cicero, De officiis in The Ethical Writings of
Cicero, 55 (Andrew P. Peabody trans. 1887).
3132 UNITED STATES v. WHITEHEAD
they say that they are sorry, they need not serve any jail time.
Thomas Whitehead is no Charles Ponzi, but still to affirm a
sentence that gives a total pass from jail time is unwise.

REINHARDT, Circuit Judge, dissenting from the denial of
rehearing en banc:

We should have taken this case en banc for the reasons set
forth in Section II.A of Judge Bybee’s dissent. United States
v. Whitehead, 532 F.3d 991, 994-96 (9th Cir. 2008).
Although, in my view, the result reached in Whitehead was
not necessarily erroneous, the cursory nature of the review in
which the majority engaged surely was. The majority’s super-
ficial opinion reflects a fundamental misunderstanding of our
responsibility as appellate judges to conduct a serious exami-
nation of the sentencing decisions of district courts and to
reverse those sentences if they do not meet the standard of
“substantive reasonableness.” Gall v. United States, 128 S. Ct.
586, 597 (2007).

I regret that Judge Gould has chosen to limit his complaint
to the sentencing of white collar criminals and that he empha-
sizes a need for an increase in the length of sentences, if only
in their case. The problem with our sentencing policies these
days is quite the opposite: the sentences we impose are far too
harsh. Those harsh penalties fall all too often on the “poor and
powerless.” Dissent from Denial of Rehearing at 3130. Some
of the sentences federal courts impose are, indeed, both
absurd and inhumane. A fairly recent example is the sentence
handed down in United States v. Hungerford, 465 F.3d 1113
(9th Cir. 2006), a case in which we were compelled, on
account of our mandatory minimum sentencing regime (and
some unconscionable prosecutorial charging decisions) to
affirm “an immensely cruel, if not barbaric, 159-year sentence
[of] a severely mentally disturbed person who played a lim-
ited and fairly passive role in several robberies during which
 UNITED STATES v. WHITEHEAD 3133
no one was physically harmed.” She was in addition a 52-
year-old first offender. Id. at 1119, 1120 (Reinhardt, J., con-
curring in the judgment). A one hundred and fifty-nine year
sentence?? The solution to our sentencing problem is, in my
view, to treat all defendants fairly, white collar and otherwise.
To that end, I am less concerned with our occasional defer-
ence to lenient district court sentencing decisions than with
our continuing obligation to ensure that sentences are not
unreasonably severe.

Appellate judges must play an important, though deferen-
tial, role in achieving this goal. I recognize that our ability to
do so is limited not only by the deference we must show to
sentencing judges but by the harsh sentencing policies Con-
gress has adopted, especially with respect to mandatory mini-
mum sentences. Still, district judges remain free in most cases
to follow the statutory principles Congress has established,
and to impose a sentence that is “sufficient, but not greater
than necessary,” taking into account, inter alia, “the nature
and circumstances of the offense and the history and charac-
teristics of the defendant.” 18 U.S.C. § 3553. The Supreme
Court has ruled, and fairness demands, that we must conduct
a serious review of the sentences imposed by district judges
to ensure that they are reasonable. We abdicate our responsi-
bility when we fail to do so — whoever the defendant may be,
and whatever the crime.
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