United States v. Derbes

United States Court of Appeals
For the First Circuit

No. 03-2067

UNITED STATES OF AMERICA,

Appellant,

v.

FRANK F. DERBES,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Boudin, Chief Judge,

Lynch and Howard, Circuit Judges.

Michael J. Pineault, Assistant United States Attorney, with
whom Michael J. Sullivan, United States Attorney, was on brief for
appellant.
Thomas R. Kiley with whom William J. Cintolo and Cosgrove,
Eisenberg and Kiley, P.C. were on brief for appellee.

May 27, 2004
 BOUDIN, Chief Judge. Frank and Robert Derbes are

officers of the Derbes Brothers construction company in Quincy,

Massachusetts. Beginning in 1995, they used various devices to

understate company and personal federal tax liability. For

example, one scheme involved having the company write checks made

payable to various subcontractors (some fictional and some real),

deducting these payments as business expenses, and then having

Derbes Brothers' employees cash the checks at local banks and

return the cash to the company. The total revenue loss to the

government attributed to Frank Derbes was about $500,000.

The scheme was uncovered, and the government indicted the

brothers for six counts each of tax evasion in violation of 26

U.S.C. § 7201 (2000). Both brothers pled guilty in November 2002.

After sentencing adjustments for acceptance of responsibility, both

brothers faced guidelines ranges of 15 to 21 months imprisonment.

U.S.S.G. §§ 2T1.1, 2T4.1 (1997). Both moved for a downward

departure on multiple grounds.

The district court granted Frank Derbes a four-level

downward departure, sentencing him to nine months of home

confinement with electronic monitoring, plus an additional fifteen

months of probation. The district court granted Robert Derbes a

one-level departure, sentencing him to a year and a day in prison,

plus two years of supervised release. The government appeals only

the four-level departure granted to Frank Derbes (whom we will

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refer to simply as "Derbes"), arguing that the departure was not

based on legitimate concerns nor supported by the factual record.

The district judge's remarks at the sentencing hearing

were brief. After rejecting several suggested grounds of

departure--aberrant behavior, charitable contributions--the court

said:

The two plausible grounds for a
departure are the ones identified by counsel,
including government's counsel.

Under Olbres, [99 F.3d 28 (1st Cir.
1996)], there is some latitude under the
Guidelines for considering the impact an
incarcerated sentence may have on the
employees of a small business that might
otherwise be placed underwater by the
incarceration of a business principal.

And health is a concern . . . .

His medical conditions are aggravated.
They are not of the type that the Bureau of
Prisons, for the most part, could not
adequately treat, but what concerns me is the
fact that he's been under psychiatric care now
for some seven years; and the one thing I do
not think the Bureau of Prisons could provide
is the connection with Mr. Derbes' treating
psychiatrist that has developed over time.

The judge's subsequent written statement of the grounds

for departure says only that the departure was granted because of

"medical reasons as more fully stated on the record in open court."

Given this cross-reference, the district court's phrase "medical

conditions" presumably refers only to mental health concerns; there

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is no indication that Frank Derbes' physical health problems

(described by his doctor as "stable") could support a departure.

Mental condition is a discouraged basis for departure

under the guidelines, U.S.S.G. § 5H1.3, so a departure is warranted

only if circumstances are extraordinary, see U.S.S.G. ch. 5, pt. H,

introductory cmt.; United States v. Maldonado-Montalvo, 356 F.3d

65, 74 (1st Cir. 2003).1 The able and experienced district judge

thought Derbes' condition qualified under this standard, but at the

time of sentencing, the district judge had no obligation to provide

written findings. Compare 18 U.S.C.A. § 3553(c) (2004) (written

findings now required). So we must reconstruct the basis and

reasoning from the record.

The presentence report explains that Frank Derbes has

been under the care of a psychiatrist, Dr. Lee Chartock, since

1997. In two paragraphs, the report explains that Derbes had in

the past struggled with thoughts of suicide and occasionally heard

voices, but these problems have not recurred since he has been

1
Derbes attempts to avoid the "discouragement" of section
5H1.3 by pointing to the unqualified statutory statement that, in
imposing a sentence, the court "shall consider" inter alia the need
"to provide the defendant with . . . medical care." 18 U.S.C. §
3553(a)(2)(D) (2000). However, subsection (b) says that the court
has to follow the Guidelines, unless a factor was not adequately
considered by the Commission, id. § 3553(b), and the cases hold
that both mental and physical condition are factors discouraged by
the Commission, regardless of whether the concern is with the need
for treatment or with some other implication. See, e.g., United
States v. Martin, 363 F.3d 25 (1st Cir. 2004); Maldonado-Montalvo,
356 F.3d at 74.

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under the care of Dr. Chartock. Derbes sees Dr. Chartock "for

individual therapy as well as medication monitoring," and Derbes

says that without his medication he tends to get "confused." In

the plea hearing, Derbes testified that he had been diagnosed as

having a "chemical imbalance and depression" seven years before,

and that he found it "very difficult to function" before he was put

on the medications.

In a letter to the court, Dr. Chartock stated that he had

been treating Frank Derbes since 1997 for major depression and

generalized anxiety disorder. Dr. Chartock explained that it had

taken several years to find the right combination of medications to

"effectively stabilize" Derbes, and that it was very important to

maintain the current regime of Paxil, Effexor, and Serax. Dr.

Chartock noted that these substances might not be available in

prison, and he said that altering the treatment regime "may result

in destabilizing Mr. Derbes, causing him to revert to a deep

depression and significant panic and anxiety."

The PROTECT Act changed the standard of review applied to

departures from the guidelines, eliminating the deference

previously accorded to a district court's application of the

guidelines to the facts of the case, see, e.g., United States v.

Lujan, 324 F.3d 27, 31 n.5 (1st Cir. 2003) (discussing deference);

instead Congress requires us to review sentencing departures de

novo, giving deference only to the district court's observation of

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witnesses and raw factual findings. 18 U.S.C.A. § 3742(e) (2004);

United States v. Thurston, 358 F.3d 51, 70 (1st Cir. 2004).

Although Derbes was sentenced on April 29, 2003--one day before the

PROTECT Act became law--the new standard of review on appeal

applies to his case. See Thurston, 358 F.3d at 70.

Arguably, the present case falls between two of our

recent precedents. In one, Maldonado-Montalvo, we reversed a

departure granted by the district court based on defendant's

depressive condition--which was serious, although it apparently did

not include explicit threats of suicide. 356 F.3d at 73-75.

There, the defendant had responded to medication and, while his

doctor wrote that incarceration would be a "catastrophic blow," id.

at 75, there was apparently no discussion of whether the same

medical regime would be available in prison.

By contrast, in United States v. Martin, 363 F.3d 25 (1st

Cir. 2004), we sustained a departure based on physical condition,

also a discouraged departure, see U.S.S.G. § 5H1.4. There, it was

shown that the defendant had a history of Crohn's Disease, that

Demerol was the only treatment that had proven successful, and that

the Bureau of Prisons would not provide this medication. Id. at

49-50 & n.39. While BOP said it could treat Martin's condition by

other means, we noted that Martin's health was "exceptionally

fragile" and that BOP had not been specific in describing

alternatives. Id. at 50.

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 In the case at hand, Derbes submitted medical evidence

that only one combination of drugs had proved successful and that

an alteration in this regime would likely prove harmful. However,

absent a further finding that the drugs would be unavailable in

prison, the case looks much like Maldonado-Montalvo. To bring it

within Martin or any other obvious formula supporting a departure,

one would have to find Derbes would not get, or was at least

unlikely to get, adequate treatment in prison.

Dr. Chartock stated in a letter that he "understand[s]"

that the specific drugs he had prescribed for Derbes might not be

available in prison. Yet the record is inconclusive on this point;

and, equally important, it is not clear how far the district judge

was concerned about the lack of drugs. While the judge did express

interest in knowing exactly what medications Dr. Chartock

prescribed for Derbes, the judge's oral statement concluded by

saying, "the one thing I do not think the Bureau of Prisons could

provide is the connection with Mr. Derbes' treating psychiatrist

that has developed over time."

This supposed vital connection could refer to drugs that

would not be obtainable in prison or refer only to the therapeutic

relationship between doctor and patient. If the former, the record

is distressingly thin as to whether the drugs would be available or

not. If the latter, there is little to show that it was the

personal relationship that was essential to Derbes' mental health

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and nothing to show that some adequate substitute would be

unavailable in prison.

We inquired of the government at oral argument about

whether the drugs in question would be available. Although the

burden of justifying a downward departure is on the defendant, the

government obviously has superior knowledge of what BOP permits.

In response the government offered BOP's own representation that

"BOP offers inmates a full range of mental health services," Fed.

Bureau of Prisons, U.S. Dep't of Justice, Legal Resource Guide to

the Federal Bureau of Prisons 31 (2003), but such general

assurances have not been given much weight. Martin, 363 F.3d at

50; United States v. Gee, 226 F.3d 885, 902 (7th Cir. 2000).

On May 4, 2004, the government submitted a 28(j) letter

saying that BOP's regional counsel had "recently clarified that BOP

does treat inmates with controlled substances, including narcotics,

when determined medically necessary by BOP medical staff" and

adding that two of the three drugs currently prescribed for Derbes

are listed in the BOP formulary and are not controlled substances;

as to the third, Serax, the letter says that it is not in the

formulary but that "BOP has informed the government [that]

appropriate substitutes are listed in the formulary."

Derbes has now responded, objecting to consideration

being given to the letter because the facts asserted are not part

of the record and should be open to dispute in the district court.

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We appreciate the government's letter; it sought to clarify and

correct answers that we ourselves had sought and received from

government counsel during oral argument. But, of course, Derbes is

not bound to accept this proffer as accurate, and there may be

further issues that Derbes might like to raise--such as to whether

realistically he has any likelihood of receiving such treatment.

In all events, the government's letter may cast further

doubt on the prospects for a departure on mental health grounds but

we remain of the view that a remand is the proper solution in this

case. Putting aside the government's recent letter, we cannot

uphold the present departure since there is as yet no firm basis in

the record for concluding that Derbes' imprisonment will prevent

adequate treatment, whether based on required drugs or a unique

therapeutic relationship. But given the district court's doubts

and ample gaps in the record, we are not willing to rule out the

possibility that a departure might yet be justified.

At the same time, it should be stressed again that our

cases are stringent in distinguishing between serious mental health

problems and a truly "extraordinary" case. See United States v.

Studley, 907 F.2d 254, 259 (1st Cir. 1990); United States v.

DeCologero, 821 F.2d 39, 43 (1st Cir. 1987). BOP is by no means

required to tailor a perfect plan for every inmate; while it is

constitutionally obligated to provide medical services to inmates,

Estelle v. Gamble, 429 U.S. 97, 103-05 (1976), these services need

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only be on "a level reasonably commensurate with modern medical

science and of a quality acceptable within prudent professional

standards." DeCologero, 821 F.2d at 43.

One other ground of departure was suggested by the

district court's oral statement, namely, the rare possibility

recognized in United States v. Olbres, 99 F.3d 28, 31-36 (1st Cir.

1996), of a departure where the defendant is essential to a small

business whose innocent employees might suffer if the company goes

out of business. However, the district judge did not repeat this

oral reference in his written statement and apparently the release

of Robert Derbes from prison is imminent.

Nevertheless, we do not foreclose the possibility of a

departure on this ground if it was intended as an alternative basis

in the district court's oral discussion, if Derbes continues to

urge a departure on this basis, and if the district court believes

that the current facts still support such a departure. The

government did not argue the point on appeal, taking the view that

the district court had not relied upon Olbres at all, but in light

of the remand, we express no view on this matter.

This remand brings to light a quirk of the PROTECT Act.

In most situations appellate courts have great flexibility in

shaping the scope of the mandate on remand. See 28 U.S.C. § 2106

(court may "remand the cause and direct the entry of such

appropriate judgment, decree, or order, or require such further

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proceedings to be had as may be just under the circumstances");

United States v. Maldonado, 242 F.3d 1, 3-4 (1st Cir. 2001). Prior

to the PROTECT Act, the circuits had developed standards for what

could be considered on a general remand for resentencing. See,

e.g., United States v. Ticchiarelli, 171 F.3d 24, 31 (1st Cir.

1999).

But the PROTECT Act says that on remand, the district

court may not depart except upon a ground that

(A) was specifically and affirmatively
included in the written statement of reasons
required by section 3553(c) in connection with
the previous sentencing of the defendant prior
to the appeal; and

(B) was held by the court of appeals, in
remanding the case, to be a permissible ground
of departure.

18 U.S.C.A. § 3742(g) (2004).

Although applying the PROTECT Act's appellate standard of

review to pending appeals is appropriate, see Thurston, 358 F.3d at

71-72, it would make no sense to apply section 3742(g)(A)

retroactively to sentences imposed before its enactment because

district courts were not at that time required to make the "written

statement of reasons [now] required by section 3553(c)." Accord

United States v. Kostakis, No. 02-1647, 2004 WL 691658, at *6 (2d

Cir. Apr. 2, 2004) (section 3742(g) limits do not apply in cases

where initial sentencing occurred before PROTECT Act became

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effective); United States v. Cole, 357 F.3d 780, 786 (8th Cir.

2004) (same).

In any event, the district court in this case did

affirmatively depart on mental health grounds in the previous round

of sentencing and referred (ambiguously) to Olbres. We mention

this new provision primarily to alert district court judges to the

change. Ordinarily it would be wise for sentencing courts to rule

expressly on each requested ground for departure, thus avoiding any

constraints that section 3742(g)(A) might otherwise cause if the

case were later remanded.

Finally, in their briefs, the parties debate the issue

whether the time Derbes has spent in home confinement and probation

should be credited against any sentence of imprisonment that may be

imposed on remand. The point was decided last month in Martin, 363

F.3d 25, which provides all the guidance necessary. Id. at 37-40.

It is generally helpful to Derbes; but how helpful depends on a

judgment of the district court as to the amount of the credit. In

any event such a credit depends on whether on remand Derbes would

otherwise receive a prison sentence.

We vacate the district court's sentence and remand for

resentencing. On remand the district court may consider Derbes'

need for therapy and medications, Olbres, and--if imprisonment is

imposed--the amount of credit that Derbes deserves for the nine

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months he has spent in home confinement and any additional time

spent on probation.

It is so ordered.

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