U.S.A. v. Bradstreet

• Decision Date: 07 February 2000
• Docket Number: No. 99-1267,99-1267
• Citation: 207 F.3d 76
• Parties: (1st Cir. 2000) UNITED STATES, Appellant, v. BERNARD F. BRADSTREET, Defendant, Appellee. Heard
• Court: U.S. Court of Appeals — First Circuit

Page 76

207 F.3d 76 (1st Cir. 2000)

UNITED STATES, Appellant, v. BERNARD F. BRADSTREET, Defendant, Appellee.

No. 99-1267

United States Court of Appeals for the First Circuit

Heard February 7, 2000

Decided March 27, 2000

Jennifer Zacks, Assistant United States Attorney, with whom Mark W. Pearlstein, Acting United States Attorney, and Jonathan L. Kotlier, Assistant United States Attorney, were on brief, for appellant.

Howard M. Cooper, with whom Thomas A. Reed, David H. Rich, and Todd & Weld were on brief, for appellee.

Before Torruella, Chief Judge, Boudin and Stahl, Circuit Judges.

STAHL, Circuit Judge.

In United States v. Bradstreet, 135 F.3d 46, 58 (1st Cir. 1998) ("Bradstreet I"), we vacated defendant-appellee Bernard F. Bradstreet's sentence and remanded for resentencing. At resentencing, the district court granted Bradstreet's motion for a downward departure because of his post-sentence rehabilitation. We affirm.

I.

Because we detailed the facts of this case in Bradstreet I, 135 F.3d at 48-55, we reiterate only those necessary to decide the narrow issues before us.

Bradstreet was the president and chief financial officer of Kurzweil Applied Intelligence, Inc. ("Kurzweil"), a company that developed voice recognition software. In the early 1990s, Kurzweil sought to sell stock to the public through an initial public offering. The offering, which Bradstreet spearheaded, violated various Securities and Exchange Commission rules, and the company issued Forms 10-Q with fraudulently inflated revenue figures. The government eventually prosecuted Bradstreet for securities fraud and garnered a conviction. During his trial, Bradstreet testified in his own defense, but the jury conclusively rejected his testimony, which was demonstrably incompatible with the verdict. Bradstreet did not accept responsibility during either the trial or at his original sentencing.

The Pre-Sentence Report ("PSR") recommended under the United States Sentencing Guidelines ("the Guidelines") a base offense level of six, see U.S.S.G. § 2F1.1; a two-level increase for more than minimal planning, see U.S.S.G. § 2F1.1(b)(2); a fifteen-level increase because the loss, here $11,471,250.00, was in excess of $10 million but less than $20 million, see U.S.S.G. § 2F1.1(b)(1)(P); a four-level increase for Bradstreet's status as an organizer of criminal activity with more than five participants, see U.S.S.G. § 3B1.1(a); and a two-level increase for his abuse of a position of private or public trust, see U.S.S.G. § 3B1.3. The PSR therefore proposed a total offense level of twenty-nine, which because Bradstreet had a criminal history category of I, yielded an 87-108 month guideline sentencing range ("GSR").

Before sentencing, the government and Bradstreet entered into a sentencing agreement whereby the government agreed both not to seek the two-level upward adjustment under U.S.S.G. § 3B1.3 for abuse of a position of trust and to recommend that the amount of loss be set only to $2.3 million. These modifications, if accepted by the district court, would give Bradstreet a total offense level of twenty-four and a GSR of 51-63 months, assuming no other departures. In exchange, Bradstreet agreed that he would seek a downward departure only on the ground that his conduct was "a single act of aberrant behavior," which we endorsed as a permissible ground for departure in United States v. Grandmaison, 77 F.3d 555, 560-64 (1st Cir. 1996). At sentencing, the government opposed Bradstreet's motion for a downward departure pursuant to Grandmaison, but the court granted it. In the end, the court established Bradstreet's offense level at twenty-four, departed downward four levels to an offense level of twenty because it found the convicted conduct to be "a single act of aberrant behavior," and sentenced Bradstreet to thirty-three months, which is at the bottom of the guideline range.

The government appealed the district court's decision to depart downward at sentencing and Bradstreet appealed his conviction. We affirmed the conviction, but ruled that the district court had erred in granting the departure, vacated the sentence, and remanded for resentencing. See Bradstreet I, 135 F.3d at 58.

Meanwhile, Bradstreet had been incarcerated since he began serving his original sentence on January 27, 1997. While in prison, he volunteered to tutor less-advantaged inmates, taught adult continuing education classes around curricula that he developed, taught inmates courses on how to view their lives more positively, volunteered and succeeded in the prison's Boot Camp Program, began serving as the prison chaplain's assistant, became a program assistant and clerk of the prison parenting program, and lectured at local colleges to business students on ethical perils in the business world.

On December 1, 1998, prior to his resentencing, Bradstreet moved for a downward departure to reflect his post-sentence rehabilitative efforts. Appended to the motion were letters of commendation from people with whom he had worked in prison as well as from several of the inmates whom he had assisted. The government opposed the motion on the grounds that because of the initial sentencing agreement, Bradstreet was barred from requesting a downward departure on any basis other than that the convicted conduct was a single act of aberrant behavior. The government also argued that Bradstreet did not qualify for a departure for post-sentencing rehabilitation, assuming such a departure ever would be proper.

The district court disagreed with both of the government's arguments and allowed Bradstreet's motion for a downward departure for his post-sentence rehabilitation. With regard to the first argument, the court reasoned that it could consider departure grounds aside from those agreed upon because "the sentencing agreement does not purport to bind, nor could it bind, the sentencing court either then or now." With regard to the second argument, the district court decided it could depart downward if it found that Bradstreet "ha[d] demonstrated post-sentencing rehabilitative conduct to an unusual or exceptional extent." Because of Bradstreet's rehabilitative efforts, which the court noted were "directed, in large degree, to others," and because Bradstreet accepted at his second sentencing responsibility for his conduct, the court found that Bradstreet's efforts warranted a downward departure. The court again departed downward four levels, and this time sentenced Bradstreet to thirty-six months, which falls in the middle of the GSR. The government appeals.

II.

On appeal, the government reiterates the two arguments it made below. First, it contends that the district court erred by not holding Bradstreet to the sentencing agreement. Second, it asserts that Bradstreet's behavior while in prison does not justify a downward departure based on post-sentence rehabilitation. We address in turn each claim.

A.

The government argues that by seeking at resentencing only a fifty-one month sentence, it performed its contractual obligation, but Bradstreet did not perform his because he sought a downward departure based on a ground other than that specified in the sentencing agreement. In the government's view, the district court should have specifically enforced the agreement by refusing to consider Bradstreet's rehabilitation claim. In response, Bradstreet argues that the government waived this argument because of footnote one in its appellate brief, which confusingly asserts that the government "could argue, but is not, that Bradstreet is in breach of the agreement by advancing the new departure argument." Bradstreet further contends the argument is waived because the government did not insist on specific performance to the sentencing judge.

If the government waived this argument, that is the end of the matter. See United States v. Slade, 980 F.2d 27, 30 (1st Cir. 1992) ("It is a bedrock rule that when a party has not presented an argument to the district court, she may not unveil it in the court of appeals."). The question, then, is whether the inartfully phrased footnote one waived any arguments about Bradstreet's breach. Given the totality of the government's arguments about the sentencing agreement, we detect no waiver. The government argued to the district court that Bradstreet should not be allowed to advance the new ground for departure because the sentencing agreement prohibited it. The appellate brief, while including footnote one, contended that Bradstreet's new motion was "barred by the agreement." In addition, the district court ruled during the sentencing hearing against the government on this very issue by noting that it was not bound by the original sentencing agreement and could consider for departure any ground that it desired. Whatever significance footnote one might have had standing alone, a broader look at what the government actually argued in its brief and at oral argument rebuts any appearance of waiver. Cf. Gitlitz v. Commissioner, 182 F.3d 1143, 1145-46 (10th Cir. 1999) (finding that "notwithstanding certain ambiguous comments of counsel during the summary judgment hearing, [the IRS] did not intend to waive any arguments previously asserted in its summary judgment motion"), petition for cert. filed, (Feb. 1, 2000); MacDonald v. General Motors Corp., 110 F.3d 337, 340 (6th Cir. 1997) (declining to find waiver when counsel's comments implying waiver were "fundamentally at odds with any intent to waive the argument").¹ In our view, the totality of the circumstances makes clear that in footnote one, the government only intended to iterate that it would not use Bradstreet's breach to withdraw from the original sentencing agreement and pursue a tougher sentence.

Finding no deliberate waiver, we address the merits of the government's argument. Courts look at sentencing agreements and plea agreements as contracts. See United States v. Sophie, 900 F.2d 1064, 1071 (7th Cir. 1990)....