Federal Sentencing Commission Limits Use of Acquitted Conduct in Sentencing Guidelines

The bipartisan United States Sentencing Commission voted unanimously to prohibit conduct for which a person was acquitted in federal court from being used to calculate a sentence range under the advisory federal sentencing guidelines. The Commission also approved additional reforms, including those that bring uniformity to sentencing for certain gun and financial crimes and provide a potential downward departure based on age. These April 17, 2024 decisions advance the Commission’s goal of creating a more effective and just sentencing system while also addressing the Supreme Court’s past concerns. The proposed amendments to the advisory sentencing guidelines will become effective on November 1, 2024, assuming Congress does not disapprove. If they go into effect, the amendments will hopefully promote greater uniformity in sentencing across the country and discourage judges from employing inequitable, albeit legal, sentencing practices. Simply put, “Not guilty means not guilty,” stated Commission Chair Judge Carlton W. Reeves.

Sentencing Background

Sentencing in the federal courts is a two-step process. The district court first must calculate the defendant’s sentencing range under the U.S. Sentencing Guidelines, which are advisory under United States v. Booker, 543 U.S. 220, 261 (2005). After calculating the advisory guidelines range, the federal judge must “engage in individualized sentencing” by considering the statutory sentencing factors under 18 U.S.C. § 3553. See United States v. Ruff, 535 F.3d 999, 1003 (9th Cir. 2008); see also Rita v. United States, 551 U.S. 338, 364 (2007). In determining a sentence, the court considers the following statutory factors: (i) the nature and circumstances of the offense and the history and characteristics of the defendant; (ii) the kinds of sentences and the sentencing range established for the applicable category of offense committed by the applicable category of defendant as set forth in the guidelines; (iii) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and (iv) the need to provide restitution to any victims of the offense.

In calculating the advisory guidelines range, federal judges consider U.S. Sentencing Guidelines factors such as the number of victims of the crime and financial losses incurred as a result. Each of these factors is associated with a point score which, when added together, equals a “Total Offense Level.” Next, the “Total Offense Level” is compared to a sentencing table that suggests ranges for a prison term. If a defendant has a history of committing crimes, they will be placed in a “Criminal History Category” that takes those previous crimes into account. Notably, the advisory guidelines were amended last year to permit a decrease of two offense levels for “Zero-Point Offenders” with no prior criminal history and whose crime did not involve aggravating factors.

The U.S. Sentencing Commission is a bipartisan judicial agency created by Congress in 1984. The Commission’s purpose is to reduce sentencing disparities and promote transparency and proportionality in sentencing. In furtherance of this objective, the agency analyzes data on federal sentencing practices and establishes guidelines that are advisory in nature but widely adhered to. The guidelines are reviewed yearly and nearly always amended in response to congressional action, appellate court decisions, community input, and research. Since the guidelines went into effect in 1987, there have been over 800 amendments implemented.

Sentencing Guidelines Amendments

The newly proposed amendment revises Guidelines §1B1.3 by adding subsection (c), providing that “[r]elevant conduct does not include conduct for which the defendant was criminally charged and acquitted in federal court unless such conduct also establishes, in whole or in part, the instant offense of conviction.”

Although “acquitted conduct” may not be considered in calculating a sentencing range, it may be considered when evaluating other offenses if the multiple charges stem from the same conduct. Application Note 10 to §1B1.3(c) states, that while “acquitted conduct cannot be considered in determining the guideline range, any conduct that establishes—in whole or in part—the instant offense of conviction is properly considered, even as relevant conduct and even if that same conduct also underlies a charge of which the defendant has been acquitted.”

The amendment adds that in “cases in which certain conduct underlies both an acquitted charge and the instant offense of conviction…, the court is in the best position to determine whether such overlapping conduct establishes, in whole or in part, the instant offense of conviction and therefore qualifies as relevant conduct.” This allows courts familiar with the individual facts of a case to identify what information is relevant and should be taken into account.

It may be challenging for courts to determine what specific conduct underlying both an acquittal and a conviction should be considered, particularly in cases in which there are “linked or related charges.” However, Commission data illustrates that courts will rarely have to make this determination; out of 62,529 sentenced individuals in the 2022 fiscal year, 1,613 were convicted and sentenced after a trial (2.5% of all sentenced individuals), and of those, only 286 (0.4% of all sentenced individuals) were acquitted of at least one offense or found guilty of only a lesser included offense.

The Supreme Court has declined to take up several cases challenging the practice of acquitted conduct sentencing, expressing the view that the Commission should first reassess the controversial practice. Some Justices said the use of acquitted conduct in calculating the advisory guidelines range “raises important questions.”

The Commission’s proposal also addresses increased loss amounts, a concept that frequently applies to white collar offenses involving theft and fraud. Based on the Guidelines Manual’s loss table, a defendant’s sentence is increased in proportion to the magnitude of the victim’s financial loss. The current Guideline only accounted for actual losses and merely referenced intended losses in the application note. In United States v. Banks, 55 F.4th 246, (3d Cir. 2022), the court ruled that the commentary conflicts with the actual guideline and thus should not be given deference. The newly proposed amendment addresses this discrepancy in Application Note 3(A) by explicitly providing in the Guideline that losses may be calculated by the greater of either actual or intended losses.

Congressional Role

Amendments to the Commission’s Guidelines must be reviewed by Congress before going into effect. Thus, Amendments to Guidelines §1B1.3 (Relevant Conduct (Factors that Determine the Guideline Range), §1B1.3(c), and §6A1.3 (Resolution of Disputed Factors (Policy Statement) will remain with Congress for a 180-day review period. If not disapproved by Congress, the amendments will become effective on November 1, 2024. Given that Congress is considering bills prohibiting the consideration of federal acquitted conduct in sentencing and have bipartisan support, the amendments to the Guideline Manual will likely go forward. Moreover, Congress’s overwhelming support for the Commission’s previous amendments to the Guideline Manual, with only one amendment being rejected out of over 800 proposals, makes it likely that the proposed amendments will also go into effect.

Retroactive Application and Impact

The Commission was divided as to whether the amendments to the Guidelines regarding acquitted conduct should apply retroactively. Retroactive application would likely result in reduced sentences for several thousands of defendants serving lengthy terms.

Under 18 U.S.C. § 3661, federal judges will still ultimately decide what factors to consider in a defendant’s sentencing, but the long-standing practice of deferring to Commission guidelines could result in fewer sentencing disparities and more equitable outcomes for defendants. Although only advisory, the Guidelines are highly influential and will likely limit the extent to which federal judges consider acquitted conduct during sentencing.

________________________________________

Authors:

Vince Farhat, Partner, Chair of the White Collar Defense & Investigations Group
Celine Ohanian, Associate
Chloe Rastegar, Law Clerk

JMBM’s White Collar Defense & Investigations Group is keenly focused on our clients’ business objectives and is committed to minimizing the disruption, anxiety, and public scrutiny that can arise from criminal and civil investigations and litigation. We are leaders in the representation of companies, boards of directors, management, and individuals in connection with a broad range of government investigations, enforcement actions, remediation and compliance, administrative proceedings, internal investigations and white collar criminal investigations and prosecutions.

This update is provided to our clients, business associates and friends for informational purposes only. Legal advice should be based on your specific situation and provided by a qualified attorney.