U.S. v. Davis, 05-3784.

• Decision Date: 14 August 2006
• Docket Number: No. 05-3784.,05-3784.
• Citation: 458 F.3d 491
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. William J. DAVIS, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

458 F.3d 491

UNITED STATES of America, Plaintiff-Appellant, v. William J. DAVIS, Defendant-Appellee.

No. 05-3784.

United States Court of Appeals, Sixth Circuit.

Argued: June 2, 2006.

Decided and Filed: August 14, 2006.

ARGUED: Benjamin C. Glassman, Assistant United States Attorney, Cincinnati, Ohio, for Appellant. C. Mark Pickrell, Waller, Lansden, Dortch & Davis, Nashville, Tennessee, for Appellee. ON BRIEF: Benjamin C. Glassman, Assistant United States Attorney, Cincinnati, Ohio, for Appellant. C. Mark Pickrell, Waller, Lansden, Dortch & Davis, Nashville, Tennessee, for Appellee.

Before: BOGGS, Chief Judge; KEITH and SUTTON, Circuit Judges.

SUTTON, J., delivered the opinion of the court, in which BOGGS, C. J., joined.

KEITH, J. (pp. 500-05), delivered a separate dissenting opinion.

OPINION

SUTTON, Circuit Judge.

After a jury convicted William Davis of two counts of bank fraud, the district court calculated a guidelines sentencing range of 30 to 37 months. After considering the § 3553(a) factors, the court imposed a sentence of one day in prison because Davis was 70 years old at the time of sentencing and because he had committed the underlying crimes 14 years earlier. Unable to conclude that this variance is reasonable, we reverse.

I.

In 1990, Davis applied for and received a $1.6 million line of credit from a local bank for Fries Correctional Equipment of Kentucky, Inc., a business in which he was a part owner and president. United States v. Davis, 397 F.3d 340, 342 (6th Cir.2005). Davis agreed to be a personal guarantor for the line of credit. Id. When the bank renewed the line of credit in 1991, Davis submitted a financial statement that omitted a $100,000 debt he had incurred during the previous year.

Fries Correctional defaulted on the loan in 1992, and the bank, invoking the personal guarantee, filed a civil action against Davis. In April 1992, during a deposition in the civil action, Davis claimed that he no longer owned several securities listed in a July 1991 financial statement. Other financial documents, however, showed this statement to be false, revealing that he had continued to own the securities until October 1992, when he sold them.

In 1992, Davis and his wife declared bankruptcy. And in August 1993, the federal government notified Davis that it intended to "initiate criminal proceedings against him" as a result of the defaulted loan. Id. at 342. When the Davis bankruptcy ended in 1996, the bank had yet to recover roughly $600,000 in loan proceeds.

On December 15, 1999, the government indicted Davis. And on May 23, 2002, a jury convicted him of two counts of bank fraud—one relating to the omission of the $100,000 loan from his 1991 financial statement, the other relating to the false statements he made during his April 1992 deposition.

In August 2003, the district court sentenced Davis. Applying the then-mandatory guidelines, it used a base-offense level of 6 and added 14 levels due to the amount of the loss. The court rejected Davis's requests for a downward departure based on:

(1) acceptance of responsibility, see JA 381 (noting that Davis had "contested the facts and ... the implications to be drawn from them");

(2) post-conduct rehabilitation, see JA 384-85 ("There, quite frankly, is no evidence that this defendant now is an improved human being over what he was before this offense ...."); JA 387 (citing Davis's testimony at sentencing as an additional justification for denying the departure and noting that the testimony "was not as candid as perhaps it could be");

(3) the government's delay in bringing the indictment, see JA 392 ("It would be difficult to say that a prosecution brought within the applicable statute of limitations is something outside the heartland of cases and beyond the thinking of the framers of the guidelines."); and

(4) the claim that the guideline range did not accurately reflect the seriousness of the offense, see JA 384 (noting that the sentencing range did not overstate the seriousness of the offense).

All of this left Davis with a guidelines range of 33 to 41 months. "Normally," the court noted, it "would be inclined to sentence in the middle or upper reaches of the guideline range," but it decided to impose a 33-month sentence on each of the two counts (to run concurrently) and 5 years of supervised release. JA 394-95. In choosing the low end of the guidelines range, the court relied on Davis's age at the time (68) and the delay between the bank fraud and sentencing (12 years). The court did not impose restitution because Davis could not afford it.

On appeal, this court affirmed Davis's conviction but remanded the case for resentencing. As to the sentencing aspect of its decision, the court reasoned that the district court had calculated the sentence under the 2002 Guidelines Manual instead of the more-lenient version in effect when Davis committed the offense (the 1991 version), and that the court's imposition of a sentence under mandatory guidelines violated United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005). See Davis, 397 F.3d at 350-52.

On April 29, 2005, the district court resentenced Davis. Using the 1991 version of the guidelines, the district court set Davis's base offense level at 6, then applied an 11-level enhancement due to the amount of the loss, see U.S.S.G. § 2F1.1 (1991), then added a 2-level enhancement for more-than-minimal planning in committing the offense, see id. § 2F1.1(b)(2). After concluding that Davis did not deserve a downward departure, the court determined that his criminal history category (I) and his offense level (19) generated an advisory guidelines range of 30 to 37 months. See JA 408.

The court then applied the factors listed in 18 U.S.C. § 3553(a) in exercising its independent judgment whether to deviate from the guidelines range. It first considered Davis's characteristics and history, see § 3353(a)(1), noting his age ("70 years and seven months"), that he was retired and had "moved back to Ohio to be near his family and his grandchildren" and that he had one prior offense (which was committed when he was a young man), JA 409. The court turned to the offenses of conviction, see § 3553(a)(1), which the court recognized were "serious when committed" and that "they remain serious," JA 409. The court pointed out, however, that the offenses had been committed "14 years ago." Id. It also noted that the defendant's "age and the length of time between the commission of the offenses and the date of sentencing" warranted consideration after Booker even though they were "not proper" to consider as grounds for a downward departure from the guidelines. Id.

In addressing "the public's interest in safety," see § 3553(a)(2)(C), the court concluded that "the public is in no danger from this defendant" because Davis is "retired," "[h]e does not control a business and in all probability has no desire to do so," JA 409-10. As for punishment, see § 3553(a)(2)(A), the court noted that "punishment to be effective must be reasonably close to the offense committed or it becomes, while not cruel and unusual, it becomes, I think, doubly erroneous," JA 410. The court was also "satisfied that the factors that [it] set forth ... are such that the sentence ... will not promote disrespect for the law." Id. See § 3553(a)(2)(A). As for deterrence, see § 3553(a)(2)(B), the court concluded that any sentence—whether it was "a day ... [or] 10 years or anything in between"— "would be sufficient to deter this defendant from committing further crimes," JA 411. Because the court believed that "the factors in this case are unique enough," it concluded "that others who might be inclined to commit bank fraud are not likely to engage in that course of conduct in the hope that they will be treated as leniently" as the defendant. Id. The district court reasoned that the public's interest in rehabilitation, see § 3553(a)(2)(D), was well-served because "the defendant" has been, "in effect, rehabilitated by the passage of time," JA 411. The potential for "disparity in sentence between persons similarly situated who commit certain crimes," see § 3553(a)(6), was likewise not a concern because "[i]n th[e] Court's opinion, and recollection, it has dealt with very few 70-year-old people who were brought before the Court for sentencing 14 years after the fact," JA 411-12. Restitution also was not an issue because, as the court had found at Davis's original hearing (a finding the government did not appeal), Davis had no ability to pay restitution.

Taking all of these considerations into account, the court sentenced Davis to one day in prison for each of the two bank-fraud counts (running concurrently and with credit for the one day served when the U.S. Marshals took him into custody), three years of supervised release (including one year of home confinement) and 100 hours of community service.

II.

On appeal, the government argues that the district court's imposition of a one-day sentence is "unreasonable[]." United States v. Booker, 543 U.S. 220, 261, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005). We agree.

In reviewing challenges to criminal sentences after Booker, whether filed by a defendant or the government, see 18 U.S.C. §§ 3742(a), (b), we have distinguished between the procedural and substantive reasonableness of sentences. See, e.g., United States v. Webb, 403 F.3d 373, 383 (6th Cir.2005). And thus far, in invalidating sentences imposed after Booker, we have done so only because the sentence was procedurally unreasonable—because, say, the district court did not appreciate the non-mandatory nature of the guidelines, see, e.g., United States v. Beasley, 442 F.3d 386, 394-95 (6th Cir.2006), did not correctly calculate the sentencing range under the guidelines, see, e.g., United States v. Hazelwood, 398 F.3d 792, 801 (6th Cir.2005), or did not consider the § 3553(a) factors, see, e.g., United States v. Ouwenga, 173 Fed.Appx....