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Criminal Fines—Applicability of Apprendi v. New Jersey

December 20, 2011

Doug Plank, Senior Attorney, National Legal Research Group 

In the landmark case of Apprendi v. New Jersey, 530 U.S. 466 (2000), the U.S. Supreme Court determined that the Sixth Amendment requires that "any fact," other than that of a prior conviction, "that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt." Id. at 490. The Apprendi case arose from the prosecution in New Jersey state court of a defendant for shooting into the home of an African-American family in his neighborhood. After the offense, the defendant made comments to the effect that he had committed the shootings because he did not want the family to live in his neighborhood. Pursuant to a plea agreement, the defendant pleaded guilty to several counts of second-degree possession of a firearm for an unlawful purpose, which carried a possible sentence of between 5 and 10 years, but he did not admit a racial motive for his actions. At sentencing, the trial judge noted the defendant's prior comments concerning the motive for the shooting and determined that because the offense had been racially motivated, the defendant should receive an enhanced sentence of 12 years in prison under the New Jersey provision allowing an increase in sentence when the crime was committed for a "biased purpose." When the legitimacy of the enhancement of the sentence by the judge reached the Supreme Court, the Court concluded that a judge's role in sentencing is constrained at its outer limits by the facts alleged in the indictment and either found by the jury beyond a reasonable doubt or admitted by the defendant; it thus concluded that it was unconstitutional for the trial judge to have imposed the enhanced sentence without a finding by a jury of racial motivation or an admission of such motivation by the defendant as part of the plea agreement.

Since the decision in Apprendi, the lower courts have struggled to apply its core principle in a variety of situations, and the Supreme Court has provided guidance by construing the scope of Apprendi in several cases. In Ring v. Arizona, 536 U.S. 584 (2002), for example, the Court applied Apprendi to an Arizona law that authorized the imposition of the death penalty if the judge found 1 of 10 aggravating factors. The Court held that the Sixth Amendment right to a jury trial precludes the use of a procedure whereby a sentencing judge, sitting without a jury, finds an aggravating circumstance necessary for imposition of the death penalty.

Subsequently, in Blakely v. Washington, 542 U.S. 296 (2004), the Court held that a state trial court violated the Apprendi rule when it sentenced the defendant to more than three years above the 53-month statutory maximum of the standard range for his offense on the basis of the judge's finding that the defendant had acted with deliberate cruelty. In United States v. Booker, 543 U.S. 220 (2005), the Court applied Apprendi to the U.S. Sentencing Guidelines, finding that the concept of mandatory Guidelines that had been applied solely by the trial judge was incompatible with Apprendi, and the Court severed and excised the provisions of the Guidelines that made them mandatory and set forth a limited standard of review on appeal. More recently, the Court found in Cunningham v. California, 549 U.S. 270 (2007), that California's determinate sentencing law violated a defendant's right to trial by jury, because it authorized the judge, not the jury, to find by a preponderance of the evidence facts that exposed a defendant to an elevated upper-term sentence.

However, in Oregon v. Ice, 555 U.S. 160 (2009), the Court declined to extend the Apprendi ruling to an Oregon rule that, in accordance with the common-law tradition, allows judges the unfettered discretion to choose between the imposition of concurrent or consecutive sentences for multiple counts on which a defendant has been found guilty. The Court rested its decision on historical practice and respect for state sovereignty, finding that the historical record demonstrated that the jury played no role in the decision to impose sentences consecutively or concurrently and that the authority of States over the administration of their criminal justice systems lies at the core of their sovereign status, leaving the Court to believe that it should not diminish that role absent a compelling reason to do so.

This Term, the Court will once again address the scope of Apprendi, this time in the context of whether a trial judge may impose a criminal fine using facts not found by the jury. The case comes to the Court from the First Circuit, which had held inUnited States v. Southern Union Co., 630 F.3d 17 (1st Cir. 2010), that Apprendi does not apply to criminal fines in any case. The prosecution in Southern Union arose from the allegation by the Government that Southern Union Company, a natural gas company, had been storing hazardous waste without a permit at an unsecured storage complex in Rhode Island. According to the complaint, Southern Union had kept on its premises 140 pounds of collected mercury, which is considered highly toxic to those who come in contact with it. The mercury had come from outdated mercury-sealed gas regulators that had been removed from customers' homes when the company installed more modern equipment in the homes. Although the company had no use for the mercury, it kept the mercury and stored it in doubled plastic bags placed in plastic kiddie pools on the floor of the storage building. In 2004, youths from a nearby apartment complex broke into the building, took the mercury, and played with it both at the storage building and back at their apartments. When the situation came to light, the Government charged Southern Union with several criminal violations under the Resource Conservation and Recovery Act, 42 U.S.C. § 6928(d), and after a nearly four-week jury trial, the company was found guilty on one count.

The statutory fine for knowing storage of hazardous waste without a permit is "not more than $50,000 for each day of violation." In sentencing Southern Union, the district court imposed a $6 million fine and a $12 million "community service obligation." At sentencing, Southern Union argued that the court could not impose a fine greater than $50,000, the maximum fine for a one-day violation, because Southern Union had presented evidence at trial from which the jury could have found that for at least some of the period of the indictment, the company had treated the loose mercury as a recyclable resource rather than as waste. Southern Union thus argued that because the jury had not determined the number of days of the violation, the trial judge could not assess the fine based on his own determination of the duration of the violation.

The court of appeals disagreed, siding with the prosecution's arguments and holding that the case of Ice supported the conclusion that the determination of the amount of the fine could be made solely by the judge. The court found that historically, judges have assessed fines without input from a jury, in direct contrast to the historical record with regard to sentences, which showed that judicial discretion was limited in this context because the jury decided what level of crime the defendant had committed, which, in turn, largely determined the sentence. With regard to Southern Union's contention that historical practices did not speak to the specific issue in dispute—the determination of the duration of an offense on which a fine is determined—the court asserted that that argument was beside the point:

Even assuming fines are similar to sentences of incarceration, this argument misses the point of the analogy and the flow of the logic used by the Ice majority. The historical record presented in Ice showed that at common law, judges chose within their unfettered discretion whether to impose consecutive or concurrent sentences, and consecutive sentences were the default rule. Ice, 129 S. Ct. at 717. The prosecution here presents strong evidence of historic practice that at common law, judges' discretion in imposing fines was largely unfettered. The Court in Ice specifically cautioned that it would be senseless to use Apprendi to nullify sentencing schemes in which legislatures have curtailed the discretion judges had at common law. Id. at 719.

630 F.3d at 35.

The court of appeals acknowledged that its position reflected a belief that Ice had effected a change in the application of the Apprendi decision and, for this point, drew on the dissent in Ice, which it found had claimed that the majority opinion in Ice had altered the method of analysis underlying Apprendi in at least five different ways, including the claim that the majority had accepted arguments that the Court had previously rejected under Apprendi about the relevance of common-law sentencing practices to the constitutionality of modern legislative sentencing schemes. Finally, the court noted that the majority in Ice had itself noted in passing that "'[i]ntruding Apprendi's rule into' decisions such as 'the imposition of statutorily prescribed fines . . . surely would cut the rule loose from its moorings.'" Id. at 36 (quoting Ice, 555 U.S. at 171-72). Thus, the court concluded, "[t]o the extent that excluding criminal fines from Apprendi requires a more restrained view of the rule's scope than did the Court's previous Apprendi-line decisions, it is the Supreme Court in Ice that has imposed the restraint." Id.

In contrast to the approach of the First Circuit, several other courts that have addressed the issue have determined that Apprendi does indeed apply to criminal fines. In United States v. LaGrou Distribution System, Inc., 466 F.3d 585 (7th Cir. 2006), for example, the Seventh Circuit held that the trial judge had erred by imposing a $1 million fine for the improper storage of meat products, when the maximum fine authorized by the statute was $500,000 and the jury had not provided any verdict with regard to an amount of loss. Subsequently, in United States v. Pfaff, 619 F.3d 172 (2d Cir. 2010), a case decided after Ice, the Second Circuit held that the district court judge had erred in imposing double the statutory maximum fine for tax evasion, based on his finding that the defendant had caused a certain pecuniary loss, where the jury had made no such finding. The court in Pfaff determined that the imposition of a criminal fine fell within the scope of Apprendi, stating:

Here, the jury found Larson guilty of twelve felony offenses, but made no findings as to the pecuniary gain or loss caused by his conduct. Absent such gain or loss findings, the "statutory maximum" fine Larson could receive was $3 million, that is, $250,000 for each of his twelve convictions per 18 U.S.C. § 3571(b)(3). This amount represents the maximum fine that could be imposed based on "the facts reflected in the jury verdict." [Blakely v. Washington, 542 U.S. 296, 303 (2004).] Therefore, by fining Larson $6 million under 18 U.S.C. § 3571(d), a fine supported only by the district court's own pecuniary loss finding, the court violated Apprendi.

Id. at 174-75; accord United States v. W. Coast Aluminum Heat Treating Co., 265 F.3d 986, 994 (9th Cir. 2001) (Apprendi would apply if a court decided to impose a Guidelines fine that exceeded the default statutory maximum in 18 U.S.C. § 3571(c)); United States v. AU Optronics Corp., No. C 09-00110 SI, 2011 WL 2837418 (N.D. Cal. July 18, 2011) (slip copy) (applying Apprendi to a fine assessed for price-fixing in violation of the Sherman Act, 15 U.S.C. § 1, and explicitly rejecting the analysis in Southern Union).

The Supreme Court's upcoming decision in Southern Union will likely resolve the conflict in the lower courts concerning the applicability of Apprendi to criminal fines. The decision will turn on whether a majority of the Court decides to follow the clear policy and language of Apprendi, as have the majority of the lower courts, or whether the Court follows the modified line of reasoning advanced by Ice, in which historical experience directs the result.

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