The National Defender Sentencing Resource Counsel has undertaken a special project to Deconstruct the Federal Sentencing Guidelines. The goal of this project is to reduce the length and severity of sentences imposed since Booker because of the now-advisory nature of the Guidelines. While this effort and the recent Supreme Court cases of Kimbrough and Gall have significantly impacted the sentences issued for individual white collar defendants, it remains to be seen what, if any,material effect will be felt on the representation of corporations or corporate sentencing under the Guidelines. There has been little or no creative discourse on this subject, leading to the unfortunate conclusion that counsel for corporations may miss out on an opportunity to shape the future of jurisprudence in this area.
In December 2007, the Supreme Court decided Kimbrough and Gall. In those cases, the Court clarified its previous ruling in Rita and held that sentencing courts have substantial discretion to impose non-Guidelines sentences. The Court held that when departing from the Guidelines, the sentencing court need not find extraordinary circumstances in order to justify those sentences. See Kimbrough v. United States, 128 S. Ct. 558 (2007); Gall v. United States, 128 S. Ct. 586 (2007). Significantly, a court may no longer apply a presumption of unreasonableness to non-Guideline sentences; instead, an appeals court should give deference to the sentencing judge's decision.
The impact of Gall and Kimbrough on sentencing in white collar cases involving individual white collar defendants is evident. Recently, Senior District Judge Block from the Eastern District of NewYork sentenced defendants, who were convicted of six counts of securities fraud, conspiracy to commit securities fraud, conspiracy to commit witness tampering and witness tampering, to 60 months of incarceration, rather than 360 months called for in the Guidelines. See United States v. Parris, 05-CR-636 (FB) (E.D.N.Y Aug. 15, 2008). Judge Block, in his Memorandum and Statement of Reasons, stated that although the defendants deserve punishment, the nature of their crimes were not of the same character and magnitude as of those who have been responsible for wreaking unimaginable losses on major corporations. Similarly, theThird Circuit will soon hear arguments in United States v. Tomko, where it will review the district court's sentence of a defendant, who was convicted of various tax violations, to home confinement instead of the Guideline-recommended incarceration.
While Gall and Kimbrough have impacted the sentences of individual white collar defendants, the effect has not translated to corporate sentences. Three reasons have been put forth to explain this. First, the Guidelines demand that corporations maintain appropriate systems to detect and report misconduct that could implicate the corporation. Because the corporation is held to the respondeat superior standard for criminal liability of its employees, officers are often obligated to take advantage of any possible leniency prior to prosecution of criminal activity. Second, Sarbanes-Oxley requires corporate attorneys to report violations to the legal officer of the company, creating more of an incentive to implement a detection and reporting system. Finally, a corporation's main objective is to avoid prosecution, not reduce the criminal fines in the Guidelines. Thus, corporations often enter into deferred criminal prosecution agreements, where prosecution will be avoided if the corporation implements certain programs.
In Tomko, the appellant's principal brief draws on a significant body of research that demonstrates the lack of factual or empirical underpinning for the sentencing ranges set forth in the guidelines. This type of analysis is at the heart of the Guideline deconstruction movement and can be applied to many of the pillars of the sentencing Guidelines. There can be no doubt that similar analytical approaches could be applied to the Guidelines for corporations. Practitioners who routinely represent corporate defendants would be well served to consider the approach taken in this project.
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