Oxborrow v. Eikenberry

• Decision Date: 12 June 1989
• Docket Number: Nos. 87-4440,88-3522,s. 87-4440
• Citation: 877 F.2d 1395
• Parties: Kenneth D. OXBORROW, Petitioner-Appellee/Cross-Appellant, v. Kenneth O. EIKENBERRY, Norman Carlson, Respondents-Appellants/Cross-Appellees. C.A.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1395

877 F.2d 1395

Kenneth D. OXBORROW, Petitioner-Appellee/Cross-Appellant, v. Kenneth O. EIKENBERRY, Norman Carlson,

Respondents-Appellants/Cross-Appellees.

C.A. Nos. 87-4440, 88-3522.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 2, 1988.

Decided June 12, 1989.

Stephen L. Farnell, Winston & Cashatt, Spokane, Wash., for petitioner-appellee/cross-appellant.

Theresa L. Fricke, Office of Atty. Gen., Olympia, Wash., for respondents-appellants/cross-appellees.

On Appeal from the United States District Court for the Eastern District of Washington.

Before ALARCON and BEEZER, Circuit Judges, and AGUILAR, ^* District Judge.

AGUILAR, District Judge:

I.

Appellant Oxborrow pled guilty to four state offenses stemming from his participation in a Ponzi pyramid investment scheme which defrauded approximately 900 to 1,200 investors. After unsuccessfully appealing his sentence to the Washington Supreme Court, Oxborrow filed a habeas corpus petition in the United States District Court for the Eastern District of Washington. The district court held that the admission of information at sentencing did not violate Oxborrow's due process rights, but found that the imposition of consecutive sentences for counts one and two, which were subject to Washington's Sentencing Reform Act ["SRA"], constituted an ex post facto application of the sentencing statutes.

Each party appeals from the district court's judgment. We hold that the habeas corpus petition should have been denied in its entirety. We affirm in part and reverse in part.

II. FACTUAL BACKGROUND:

In August of 1979, Kenneth Oxborrow began selling commodity investments through the Wheatland Investment Company. Oxborrow promised investors they would receive a return on their investment of two percent per week. Only a small percentage of the money was actually invested in the commodities market, however. Instead Oxborrow diverted the investments to his own use, or used them to pay the promised dividends to earlier investors.

On August 2, 1984, after the dividend checks began to bounce, the Washington State Department of Licensing served a cease and desist order on Kenneth Oxborrow and the Wheatland Investment Company. Undeterred, petitioner Oxborrow accepted "investments" of over $1,000,000.00 in August.

After filing for bankruptcy, Oxborrow voluntarily contacted the federal and state authorities and negotiated a plea bargain. In state court, he pled guilty to four separate counts: count one: willful violation of a cease and desist order; count two: theft in the first degree; count three: fraud in connection with the offer and sale of a security; count four: theft in the first degree.

Oxborrow was charged with having committed counts one and two between August 3, 1984 and August 31, 1984, bringing these crimes within the scope of the SRA which took effect July 1, 1984. Wash.Rev.Code Ann. Sec. 9.94A.905 (1988) [hereinafter "RCW"]. The SRA did not apply to counts 3 and 4.

The avowed purpose of the SRA was to "make the criminal justice system accountable to the public" by structuring sentences without eliminating the discretionary decision-making of the judge. RCW 9.94A.010. The SRA establishes standard, presumptive sentences for all state crimes. However, a court may reach outside the presumptive range and order an "exceptional" sentence "if it finds ... that there are substantial and compelling reasons justifying an exceptional sentence." RCW 9.94A.120(2) ¹. The court must set forth its reasons for imposing the exceptional sentence in written findings of fact and conclusions of law. RCW 9.94A.120(3).

Except for particular circumstances not present in Oxborrow's case, RCW 9.94A.400 states that multiple sentences are to be served concurrently and not consecutively. However, RCW 9.94A.120(13) allows for a departure from 9.94A.400 as an exceptional sentence requiring written findings of fact and conclusions of law.

The Washington legislature provided an "illustrative" list of factors for the court to consider in exercising its discretion to impose an exceptional sentence in RCW 9.94A.390--"Departures from the guidelines." ² Four enumerated circumstances were listed under the title "aggravating circumstances", including:

The offense was a major economic offense or series of offenses ... [that] involved multiple victims, ...actual monetary loss substantially greater than typical for the offense; ... a high degree of sophistication or planning or occurred over a lengthy period of time; ... [and] [t]he defendant used his or her position of trust, confidence, or fiduciary responsibility to facilitate the commission of the offense.

Former RCW 9.94A.390(2) ³.

This section also suggested sentence enhancement if the offense was a violation of the Uniform Controlled Substances Act, related to trafficking, and "the operation of the multiple offense policy of RCW 9.94A.400 results in a presumptive sentence that is clearly too lenient...." Former RCW 9.94A.390(4)(h). The entire section ended by reiterating that "the above considerations are illustrative only and are not intended to be exclusive reasons for exceptional sentences." Former RCW 9.94A.390.

Although the presumptive sentence for count one was 0-12 months, and for count two was 0-90 days, the trial court sentenced Oxborrow to 5 years on count one and 10 years on count two. ⁴ In addition, the court ordered that the sentences be served consecutively. The court justified this exceptional sentence in a written order which noted that the defendant obtained over fifty-five million dollars from over one thousand investors. The investors were spread out over many counties in the state and some were elderly, blind, or pensioners who suffered extreme financial loss and hardship from Oxborrow's pyramid scheme. The court also found that the defendant enjoyed an undeserved, luxurious style of living off the investors' funds.

Although the court did not refer to the SRA, its conclusions of law tracked the language of RCW 9.94A.390 by referring to the scale and sophistication of the economic crimes and the abuse of investors' trust and confidence.

Oxborrow appealed his exceptional sentence to the Washington Supreme Court. The court affirmed the sentence. State v. Oxborrow, 106 Wash.2d 525, 723 P.2d 1123 (1986).

Thereafter, Oxborrow filed a petition for a writ of habeas corpus in the United States District Court for the Eastern District of Washington alleging that 1) the trial court's sentence was based on untrue and unreliable information admitted during the sentencing phase in violation of his due process rights, and 2) at the time of his conviction, the SRA did not allow the imposition of consecutive sentences for economic crimes.

The district court found that the consecutive sentences constituted an ex post facto application of the sentencing statutes in violation of Oxborrow's due process rights and granted habeas corpus relief. The district court also found that the sentence was not tainted by unreliable information.

III. DISCUSSION:

(A) Standard of Review.

We review the grant or denial of a writ of habeas corpus de novo. Weygandt v. DuCharme, 774 F.2d 1491, 1492 (9th Cir.1985).

(B) The SRA Provided For Consecutive Sentences In 1984.

On appeal before the Washington Supreme Court, Oxborrow contended that the trial court exceeded its authority under the SRA by imposing consecutive, rather than concurrent sentences. The Washington Supreme Court rejected this argument for two reasons.

First, the court found that the legislature had recognized the possibility of consecutive sentences for economic crimes with aggravated circumstances, when "[t]he operation of the multiple offense policy of RCW 9.94A.400 results in a presumptive sentence that is clearly too lenient in light of the purpose of this chapter...." Oxborrow, 106 Wash.2d at 534, 723 P.2d 1123 (quoting former RCW 9.94A.390(4)(h)).

However, this illustrative "aggravating circumstance" was listed as subparagraph (h) under paragraph 4--Uniform Controlled Substances Act--and not as a separate "aggravating circumstance." Nevertheless, the court dismissed, as meritless, the contention that this limited its application to violations of the Uniform Controlled Substances Act. Oxborrow, 106 Wash.2d at 535, 723 P.2d 1123. This finding is supported by the official comments to RCW 9.94A.390, which described the listing of this factor as "4(h)" instead of "5" as a scrivener's error.

Both the Commission and the legislature intended for this example of an aggravating factor to apply to any crime, not just for violations of the Uniform Controlled Substances Act ... As these are all illustrative factors only, the intent of State v. Oxborrow, 106 Wash.2d at 535, 723 P.2d 1123, (quoting Implementation Manual, Washington Sentencing Guidelines Comm'n, Sec. 9.94A.390, Comment (1984)).

the Legislature should control over such scrivener's error.

The Washington Supreme Court must be recognized as the ultimate expositor of its own state law. Mullaney v. Wilbur, 421 U.S. 684, 691 n. 11, 95 S.Ct. 1881, 1886 n. 11, 44 L.Ed.2d 508 (1975); Winters v. New York, 333 U.S. 507, 514, 68 S.Ct. 665, 669, 92 L.Ed. 840 (1948); Knapp v. Cardwell, 667 F.2d 1253, 1260 (9th Cir.1982). Our deference to the Washington Court is suspended only upon a finding that the court's interpretation is untenable or amounts to a subterfuge to avoid federal review of a constitutional violation. Knapp v. Cardwell, 667 F.2d at 1260.

In this instance, the state court's application of the illustrative consideration to Oxborrow's case is neither untenable nor a subterfuge. The Washington legislature explicitly counseled that the listings set forth in RCW 9.94A.390 were illustrative and not exhaustive. See State v. Fisher, 108 Wash.2d 419, 427-28, 739 P.2d 683 (1987) (aggravating circumstances set forth in RCW 9.94A.390 not exclusive); State v. Armstrong, 106 Wash.2d 547, 550, 723 P.2d 1111 (198...