10/11/24: An “oily bilge water” case

In United States v. Korotkiy, --- F.4th ---, No. 23-2443 (9th Cir. 2024), a split decision, the majority affirmed the district court’s order denying Denys Korotkiy’s motion to dismiss a count charging him under 33 U.S.C. § 1908 with violating 33 C.F.R. § 151.25 (2023), a regulation that requires shipmasters to, among other things, maintain a record of certain bilge-water operations while in U.S. waters.

The opinion is long. The basic question is whether "maintain" means maintain accurately or just maintain as in keep in good condition.   The majority went with the first definition.  Here is the introduction and conclusion: 

Under international and federal law, it is unlawful to dump the polluted water that collects in a boat’s bottom— otherwise known as “oily bilge water”—while at sea. Those same laws also require ships to log their bilge-water operations in an Oil Record Book. Defendant and Chief Engineer Denys Korotkiy, along with the crew aboard the foreign-flagged ship MV Donald, flouted those laws by dumping oily bilge water on the high seas and covering it up with misleading entries in the ship’s Oil Record Book. After making port in the United States and presenting the Oil Record Book to U.S. officials, Korotkiy faced prosecution under federal law, including 33 C.F.R. § 151.25 (2023). That regulation requires shipmasters to, among other things, “maintain” a record of certain bilge-water operations in an Oil Record Book while in U.S. waters. And the MV Donald’s record was—to put it simply—inaccurate. Korotkiy moved to dismiss his indictment, arguing that “maintain” does not mean “maintain accurately” and that § 151.25 neither applied to him nor proscribed his conduct. 

The district court was unpersuaded. It applied out-of-circuit case law to find that Korotkiy could be charged for causing the failure to maintain an accurate record of bilgewater operations in an Oil Record Book at port under § 151.25. On appeal, Korotkiy urges us to reverse the district court’s order because: (1) § 151.25 does not require crewmembers to maintain substantively “accurate” records in Oil Record Books; (2) neither Congress nor the international community intended for such prosecutions to occur; and (3) only ship masters, and not chief engineers, should be charged for violations of § 151.25. Although this is a matter of first impression in the Ninth Circuit, we join the First, Second, Third, and Fifth Circuits. We hold that the regulation’s plain language proscribes Korotkiy’s conduct and affirm the district court’s decision.

In sum, the Ionia, Jho, Vastardis, and Hornof courts have all considered and rejected arguments resembling Korotkiy’s, uniformly holding that 33 C.F.R. § 151.25 imposes a duty upon foreign-flagged vessels to maintain accurate (or at least not knowingly inaccurate) Oil Record Books while in U.S. territorial waters. Korotkiy does not offer a “compelling reason” to chart a separate course and “create a circuit split.” Given § 151.25’s plain language and the law’s purpose, we decline his invitation to do so and affirm the district court’s order.

10/8/24: Interesting categorical analysis case in the VICAR murder context

In United States v. Elmore, --- F.4th ---, No. 22-16539 (9th Cir. 2024), the Court reversed the district court’s denial of Reginald Elmore’s 28 U.S.C. § 2255 motion challenging the validity of his conviction for use or possession of a firearm during murder in aid of racketeering in violation of 18 U.S.C. § 924(j)(1), and remanded for further proceedings.

Unless you are a categorical-analysis expert, this decision can be tricky.  Here is some of the key language:

Reginald Elmore challenges the validity of his 2019 conviction for use or possession of a firearm during murder in aid of racketeering in violation of 18 U.S.C. § 924(j)(1). To be valid, Elmore’s § 924(j)(1) conviction requires a predicate “crime of violence,” meaning an offense that “has as an element the use, attempted use, or threatened use of physical force against the person or property of another.” 18 U.S.C. § 924(c)(3)(A). The predicate offense for Elmore’s § 924(j)(1) conviction—VICAR murder in violation of 18 U.S.C. § 1959(a)(1)1—itself requires a predicate violation of state or federal law. 

We hold that the modified categorical approach must be applied to determine the elements of Elmore’s charged VICAR offense. We conclude that Elmore was charged with VICAR murder in aid of racketeering predicated on murder under California law. Because we are persuaded that determining whether this charged offense “has as an element the . . . use of physical force” against another person requires considering whether California murder necessarily involves the requisite force, we reverse and remand to the district court for further proceedings. 

Elmore’s 924(j)(1) conviction requires a valid predicate “crime of violence.” Section 924(c)(3) defines a crime of violence as a felony offense that “has as an element the use, attempted use, or threatened use of physical force against the person or property of another,” or one “that[,] by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense.” 18 U.S.C. § 924(c)(3)(A)–(B). When Elmore entered his guilty plea, both the first clause of this definition—the “elements” or “force” clause—and the second—the “residual” clause—were in effect. Shortly after his guilty plea, the Supreme Court invalidated the residual clause of § 924(c)(3) for vagueness. Davis, 588 U.S. at 470. Thus, to constitute a predicate crime of violence sufficient to support Elmore’s § 924(j)(1) conviction, the dismissed VICAR charges must satisfy § 924(c)(3)(A), the elements clause of § 924(c)(3).

In Elmore’s case, we must determine whether the elements of the predicate charged VICAR offenses necessarily involve the “use, attempted use, or threatened use of physical force against the person or property of another.” 18 U.S.C. § 924(c)(3)(A). “Unless the least culpable act criminalized [by the statute] entails that force, the statute is not a categorical match with the elements clause, and it does not qualify as a crime of violence.” Begay, 33 F.4th at 1091.

We [] agree with our sister circuits that “the modified categorical approach applies to substantive VICAR offenses, and that ‘a substantive VICAR offense is a crime of violence [under § 924(c)(3)(A)] when predicated on at least one violent crime in aid of racketeering acts.’”

Applying the modified categorical approach, we conclude that Elmore was charged with VICAR murder in aid of racketeering under 18 U.S.C. § 1959(a)(1) predicated on murder in violation of California law.

To find a principal guilty of this substantive crime, a jury would have to find that the defendant committed California murder for the purpose of promoting their position within, or receiving something of value from, a qualifying racketeering enterprise.

We have never addressed how courts should analyze VICAR offenses for this purpose. Elmore argues that, when applying the modified categorical approach to determine whether the charged VICAR offense satisfies the elements clause, courts should look through to the elements of the charged VICAR murder predicate (here, California murder). The government argues that every charged VICAR murder necessarily has generic federal murder as an element, so courts need not look to the charged predicate at all. In the context of this case, Elmore has the better argument. 

Although we have recognized that, in limited circumstances, the federal generic definition of the offense may be substituted for the state-law definition, see Adkins, 883 F.3d at 1210–11, we have never addressed whether generic murder is an independent element of VICAR murder, such that it should be charged or instructed. And we need not consider that question today. We hold only that where, as here, application of the modified categorical approach reveals that the predicate state-law violation supplied the definition of murder for the VICAR offense, courts should look through to the elements of that predicate violation to determine whether the VICAR offense, as charged or convicted, constitutes a crime of violence under § 924(c)(3)(A).  

Where, as here, there is no evidence that a generic offense was an element of the charged VICAR offense, courts should look through to elements of the charged state-law predicate violation to determine whether the VICAR offense satisfies § 924(c)(3)(A), the elements clause of § 924(c)(3).

Here, such analysis requires determining whether California murder “has as an element the use, attempted use, or threatened use of physical force against the person or property of another,” § 924(c)(3)(A), such that Elmore’s charged VICAR murder offenses are a valid predicate for his § 924(j)(1) conviction.

Because the district court did not consider whether California murder is a crime of violence and declined to address the government’s procedural arguments, we reverse and remand for further proceedings consistent with this opinion.

10/1/24: Case on Guidelines enhancement for hate crime motivation under U.S.S.G. § 3A1.1.

In United States v. Patterson, --- F.4th ---, No. 22-50287 (9th Cir. 2024), the district court imposed a sentencing enhancement under U.S.S.G. § 3A1.1 for a hate crime motivation.  On appeal, the Court vacated and remanded for resentencing.

The question we address is whether the sentencing enhancement for a hate crime motivation, found in U.S. Sentencing Guidelines Manual (USSG) § 3A1.1(a), requires a finding that the defendant was motivated by hate or animus. We conclude that such a finding is required. Because the district court imposed the enhancement without finding beyond a reasonable doubt that the defendant was motivated by hate or animus, we vacate the sentence and remand for resentencing.

The title, history, purpose, and ordinary understanding of the term “hate crime” all indicate that application of the enhancement requires the trier of fact to find beyond a reasonable doubt that the defendant acted with animus. We vacate the sentence and remand for resentencing.

9/30/24: Lengthy health-care fraud decision

In United States v. Solakyan, --- F.4th ---, No. 22-50023 (9th Cir. 2024), the Court (1) affirmed Sam Sarkis Solakyan’s conviction for (a) conspiracy to commit honest-services mail fraud and health-care fraud and (b) honest-services mail fraud and aiding and abetting; and (2) vacated the district court’s restitution order.  Solakyan was the owner and operator of multiple medical-imaging companies that routed unsuspecting patients from complicit physicians and medical schedulers to his companies for superfluous magnetic resonance imagery (“MRI”) scans and other medical services.

The Court considered a host of challenges to the convictions and restitution order.  Here are some of the key determinations.  

We now hold that under Skilling and Milovanovic, honest-services mail fraud, as proscribed by 18 U.S.C. §§ 1341 and 1346, encompasses bribery and kickback schemes that deprive patients of their intangible right to the honest services of their physicians.

We must [] determine whether § 1346 requires the government to prove in a private-sector case that the victims of the fraudulent scheme suffered some kind of tangible harm as an element of the offense

We [] hold that actual or intended tangible harm is not a necessary element for prosecution under §§ 1341 and 1346. Rather, the same elements required to prove honest-services fraud in a public-sector case, including fraudulent intent and materiality, apply in a private-sector case as well

This brings us to Solakyan’s claim that the court erred in ordering a restitution amount that is distinct from the loss amount calculated for purposes of sentencing. The district court did not err. As we recently stated, “[t]here is no categorical rule that restitution must be equal to or less than the amount of loss found when applying Sentencing Guidelines § 2B1.1(b)(1) or similar loss-based Guidelines sections.” “A discrepancy, standing alone, does not establish legal error.”  Accordingly, a court’s leniency on the loss calculation for sentencing purposes does not hamstring its discretion to impose a larger restitution order in an amount fully borne by a defendant’s victims. 

[T]he district court never explained why it did not deduct from the restitution order the value of medically necessary MRIs. This Court’s actual loss rule requires deducting from the total restitution amount the value of services for which insurers would have paid, absent Solakyan’s fraud. Such deductions include any medically necessary and otherwise lawful MRIs had the patients been insured—an analysis that the Government made and the court accepted for determining the “conservative” loss amount under the Sentencing Guidelines. We hold that the district court’s failure to make specific findings supporting its restitution amount, in particular as to offsets, was an abuse of discretion.

We affirm Solakyan’s conviction but vacate the restitution order and remand to the district court to determine whether the total loss amount should be reduced, at least in part, by the cost of reimbursement for medically necessary MRIs the insurers would have incurred had Solakyan acted lawfully. 

9/12/24: A couple of sentencing decisions

First, in United States v. Brewster, --- F.4th ---, No. 23-329 (9th Cir. 2024), the Court affirmed a sentence imposed following the defendant’s guilty plea to one count of being a felon in possession of a firearm.

The Court rejected a variety of sentencing claims.  The only thing that jumped out at me was the Court's conclusion that data from the Sentencing Commission’s Judiciary Sentencing INformation (JSIN) online tool was sufficiently reliable to consider at sentencing.  I don't recall seeing this in a prior published opinion (but I certainly could be wrong about that).  

In sum, the district court did not err, much less clearly err, in finding that the JSIN data was reliable. Thus, perforce, it bore some minimal indicia of reliability. The JSIN data came from a reliable source designed specifically for judges to use during sentencing to fulfill their obligations under § 3553(a)(6). The JSIN data was also corroborated by other unchallenged evidence. Finally, even though he could have, Brewster offered no evidence to contradict or materially undermine JSIN’s reported average and median sentences. 

Next, in United States v. Avendano-Soto, --- F.4th ---, No. 23-281 (9th Cir. 2024), the Court affirmed the defendant’s conviction and sentence following his guilty plea to assaulting a federal officer resulting in bodily injury.  Again, not much new in this case, but the Court's discussion of the Montoya pronouncement requirement is somewhat noteworthy.  

In the District of Arizona, General Order 17-18 "lists thirteen 'standard' conditions, all based on the thirteen 'standard' conditions recommended for supervised release in § 5D1.3 of the Guidelines."  The Court noted that: 

Under Montoya, “a district court must orally pronounce all discretionary conditions of supervised release in the presence of the defendant.” “[T]his pronouncement requirement is satisfied if the defendant is informed of the proposed discretionary conditions before the sentencing hearing and the district court orally incorporates by reference some or all of those conditions, which gives the defendant an opportunity to object.” 

Because Avendano reviewed and understood the PSR, and the PSR incorporated the conditions in General Order 17-18, Avendano had sufficient notice that he would be subject to the conditions in General Order 17-18.4 Thus, the district court satisfied Montoya’s pronouncement requirement.

9/11/24: Lengthy bribery decision

In United States v. Shen Zhen New World I, LLC, --- F.4th ---, No. 23-972 (9th Cir. 2024), the Court affirmed a real estate development company’s convictions on three counts of honest services mail and wire fraud, in violation of 18 U.S.C. §§ 1341, 1343, 1346; one count of federal-program bribery, in violation of 18 U.S.C. § 666(a)(2); and four counts of interstate and foreign travel in aid of racketeering, in violation of the Travel Act, 18 U.S.C. § 1952(a)(3).

This case revolves around a pay-to-play scheme between a real estate developer and a former LA Councilmember.  The developer remains a fugitive in China, so the case went to trial solely against his company. 

First, the Court rejected the defendant's sufficiency challenge.  It held that, when based on bribery, a conviction for honest-services fraud requires proof of the bribe-giver’s intent to enter a quid pro quo. But the bribery offense does not require an agreement to enter a quid pro quo with the public official when the defendant is the bribe-giver.  A defendant offering a benefit to a public official with the intent to influence any official act in exchange suffices.

Second, the Court rejected the defendant's challenge to the district court's refusal to provide certain jury instructions on quid pro quo and specified official acts. 

Third, the Court affirmed the defendant's Travel Act convictions. The defendant argued that California’s bribery statutes are too broad to serve as federal bribery predicates under the “categorical approach” required under the Travel Act. The Court determined that, as construed by the California courts, bribery under California law is broader than the Travel Act’s generic definition of bribery. But the mismatch between the generic definition of bribery and California bribery statutes do not require vacating Shen Zhen’s convictions because the jury convicted Shen Zhen based on elements that conform to the generic definition of bribery under the Travel Act.  

[Of note, there is something about the Court's application of the categorical approach on this issue that seems off to me, but I need to review the case again to figure out what.  If anyone comes up with the answer, please let me know]. 

Fourth, the Court held that the district court properly admitted evidence of the councilmember's general-pay-to-play scheme.

Finally, the Court held that the district court wrongly excluded as inadmissible hearsay the developer's alleged statements about his state of mind regarding his gift-giving. 

As the parties acknowledge, defense counsel sought to elicit Huang’s out-of-court response to Zheng that Huang thought he and Huizar “were just having fun,” “not doing anything wrong,” and that he “had not asked . . . Huizar for anything.” Had Zheng been able to offer this testimony, it would have been probative not as to the truth of these statements but whether Huang felt culpable in his interactions with Huizar. Although Zheng could not testify as to the factual basis for Huang’s mindset, at least some of the excluded statements were probative of Huang’s “then-existing state of mind” and “mental feeling” about his actions—admissible as an exception to the rule against hearsay.

The Court concluded, however, that the error was harmless.

9/4/24: Helpful decision holding that Cal. PC 245(a)(1) does not qualify as a crime of violence

In United States v. Gomez, --- F.4th ---, No. 23-435 (9th Cir. 2024), the Court vacated a sentence and remanded for resentencing in a case in which the district court applied a career offender enhancement under U.S.S.G. § 4B1.1 on the ground that Gomez’s prior conviction for assault with a deadly weapon under California Penal Code § 245(a)(1) was a “crime of violence.”  The Court held this was error.

Jesus Ramiro Gomez was sentenced to 188 months’ incarceration for one count of distribution of methamphetamine. At sentencing, the district court applied a career offender enhancement, which doubled the recommended range for Gomez’s sentence. To apply the enhancement, the district court found that Gomez’s prior conviction for assault with a deadly weapon under California Penal Code § 245(a)(1) was a crime of violence. We have previously held that California Penal Code § 245(a)(1) constitutes a crime of violence, but our decisions are clearly irreconcilable with the Supreme Court’s ruling in Borden v. United States, 593 U.S. 420 (2021). In light of Borden, we hold that convictions under California Penal Code § 245(a)(1) do not qualify as crimes of violence, and the district court incorrectly applied the career offender enhancement in this case. 

Because we conclude California’s assault statute sweeps in reckless uses of force, as defined in Borden, a conviction under § 245(a)(1) is not a categorical match with the elements clause and does not constitute a crime of violence.

In sum, Borden establishes a bright line rule: if a statute criminalizes uses of force committed only with a conscious disregard of a substantial risk to another person, it is not a crime of violence. Our prior cases do not apply that test, and thus improperly categorize § 245(a)(1) as a crime of violence in violation of Borden. 8 They are not merely in tension with Borden; they are irreconcilable. 

[A]s explained above, § 245(a)(1) does not limit its scope to uses of force with a mens rea greater than recklessness, let alone extreme recklessness. It thus does not constitute aggravated assault under the enumerated offenses clause.  

Beyond these important holdings, the Court also keeps alive its helpful rule that, "[w]hen an appeal presents a pure question of law and the opposing party is not prejudiced by the defendant’s failure to object, we may apply de novo review in our discretion."  The Court explained:  "Under our established precedent, because we do not need a factual record to resolve the purely legal question before us, we exercise our discretion to review the challenge de novo."